Best’s News & Research Service - April 23, 2019 01:27 PM (EDT)
AM Best Affirms Credit Ratings of Safety Insurance Group, Inc. and its Subsidiaries
- April 23, 2019 01:27 PM (EDT)
Oldwick //BestWire// - AM Best has affirmed the Financial Strength Rating of A (Excellent) and the Long-Term Issuer Credit Ratings (Long-Term ICR) of “a+” of Safety Insurance Company, Safety Indemnity Insurance Company and Safety Property and Casualty Company, collectively referred to as Safety Group (Safety). Concurrently, AM Best has affirmed the Long-Term ICR of “bbb+” of Safety Insurance Group, Inc. (Delaware) [NASDAQ/GS: SAFT], the publicly-traded parent of Safety. The outlook of these Credit Ratings (ratings) is stable. All companies are domiciled in Boston, MA, except where specified.
The ratings reflect Safety’s balance sheet strength, which AM Best categorizes as very strong, as well as its strong operating performance, neutral business profile and appropriate enterprise risk management (ERM).
The very strong balance sheet strength is derived from risk-adjusted capitalization maintained at the strongest level, favorable loss reserve development trends and sound liquidity measures. Safety also benefits from the financial flexibility afforded by its publicly-traded parent, which has a debt-free balance sheet and the ability to access the public debt and equity markets to raise capital if needed.
Safety’s operating performance has been favorable, supported by both favorable net underwriting income and net investment income. Above-average profitability has supported capital growth and is derived from management’s ability to successfully manage the challenges in Massachusetts, where it writes the majority of its business.
The business profile is considered neutral due to its leading market positions and diverse product offerings, partially offset by its concentration in Massachusetts, which exposes the group to above-average economic, regulatory and legislative risks. ERM is considered appropriate for the group’s size and the complexity of its underwriting, investment and other risks based on its ERM framework and controls.
This press release relates to Credit Ratings that have been published on AM 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 AM 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. For information on the proper media use of Best’s Credit Ratings and AM Best press releases, please view Guide for Media - Proper Use of Best’s Credit Ratings and AM Best Rating Action Press Releases.
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