Best’s News & Research Service - November 08, 2016 03:55 PM (EST)
A.M. Best Revises Outlooks to Positive for Members of Atain Insurance Companies
- November 08, 2016 03:55 PM (EST)
Oldwick //BestWire// - A.M. Best has revised the outlook to positive from stable and affirmed the Financial Strength Rating of A (Excellent) and the Long-Term Issuer Credit Rating of “a+” of Atain Specialty Insurance Company (Farmington Hills, MI) and Atain Insurance Company (Arlington, TX), which are collectively referred to as Atain Insurance Companies (AIC) (Farmington, MI).
The Credit Ratings (ratings) reflect AIC’s strong risk-adjusted capitalization, sustained underwriting and operating profitability, solid liquidity, and management’s adherence to conservative reserving and investing practices. The ratings also take into consideration the distinct benefits derived from being affiliated with a critical component of its distribution network. These positive factors are partially offset by its limited business profile and dependence on an affiliated wholesaler as its single-largest production source. The rating and revised outlooks are based on the expectations that AIC will be able to sustain its historical level of performance, based on a sound business plan that includes the benefits of being affiliated with AJK Enterprises in terms of resources and services, as well as in its ability to pursue profitable growth opportunities via affiliates including Burns & Wilcox, Ltd, one of the largest independently owned insurance wholesalers in the U.S.
These ratings apply to Atain Specialty Insurance Company and its wholly owned subsidiary, Atain Insurance Company, which participate in an intercompany reinsurance pooling agreement. The positive outlooks also contemplate continued operating profitability, strong preservation of capital and the ability to navigate market cycles through its long-standing agency partnerships.
AIC continues to maintain a strong level of risk-adjusted capitalization, as measured by Best’s Capital Adequacy Ratio (BCAR). This excellent level of capitalization is augmented by growth in retained earnings, as well as AIC’s adherence to a high quality investment portfolio. Being part of AJK Enterprises, AIC also has the ability to participate and increase its retention on matured programs produced by its affiliated wholesaler. This composition of business has proven to be profitable and has helped drive improved net underwriting results and consistent operating profitability. AIC also benefits from synergies and substantial expense efficiencies, which result in lower cost and enhanced underwriting profitability.
Positive rating action may result from a continuation of better than average operating results and advancement of risk-adjusted capital through retained earnings.
Downward ratings pressure, while unlikely, could result from a material decline in risk-adjusted capital or a weakening in operating performance that falls markedly short of its peers and expectations. Additional negative rating pressure could result from a sudden, unforeseen shift in AIC’s present business strategy or distribution model.
This press release relates to Credit Ratings that have been published on A.M. Best’s website. For all rating information relating to the release and pertinent disclosures, including details of the office responsible for issuing each of the individual ratings referenced in this release, please see A.M. Best’s Recent Rating Activity web page. For additional information regarding the use and limitations of Credit Rating opinions, please view Understanding Best’s Credit Ratings.
A.M. Best is the world’s oldest and most authoritative insurance rating and information source.