Best’s News & Research Service - December 18, 2019 03:54 PM (EST)
AM Best Revises Outlooks to Stable for Safeway Insurance Group Members
- December 18, 2019 03:54 PM (EST)
Oldwick //BestWire// - AM Best has revised the outlooks to stable from negative and affirmed the Financial Strength Rating of A (Excellent) and the Long-Term Issuer Credit Rating of “a” of the members of Safeway Insurance Group (Safeway). Safeway is composed of four members focused on the non-standard auto segment that operate through an intercompany pooling agreement with Safeway Insurance Company (Westmont, IL) as the lead company. The other members are Safeway Insurance Company of Alabama, Inc. (Westmont, IL), Safeway Insurance Company of Georgia (Alpharetta, GA) and Safeway Insurance Company of Louisiana (Lafayette, LA).
The ratings reflect Safeway’s balance sheet strength, which AM Best categorizes as very strong, as well as its adequate operating performance, neutral business profile and appropriate enterprise risk management.
The revised outlooks are based on the improvement in underwriting and operating results in 2018 and through third-quarter 2019, and AM Best’s expectation that these results will continue over the near to intermediate term. The improvement was driven by earning substantial rate increases in all states of operation, the re-underwriting of the non-standard auto book of business and various other strategic initiatives implemented in each state.
The ratings are based on Safeway’s strongest level of risk-adjusted capitalization, modest underwriting leverage, strong liquidity measures, conservative investment risk profile, as well as minimal reinsurance dependence and catastrophe exposure. These positives are partially offset by adverse loss reserve development in most calendar and accident years, although some improvement in development trends has been reported recently.
Safeway’s operating performance had deteriorated from 2015 through 2017 due to increased loss frequency and severity trends, which had impacted the entire non-standard auto segment, and resulted in Safeway’s negative outlooks.
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 Guide to 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.
AM Best is a global credit rating agency, news publisher and data provider specializing in the insurance industry. The company does business in more than 100 countries. Headquartered in Oldwick, NJ, AM Best has offices in cities around the world, including London, Amsterdam, Dubai, Hong Kong, Singapore and Mexico City.