Best’s News & Research Service - November 04, 2022 10:09 AM (EDT)
AM Best Assigns Credit Ratings to Concord Specialty Insurance Co; Affirms Credit Ratings of Lexington National Insurance Corp
- November 04, 2022 10:09 AM (EDT)
Oldwick //BestWire// - AM Best has assigned a Financial Strength Rating (FSR) of A- (Excellent) and a Long-Term Issuer Credit Rating (Long-Term ICR) of “a-” (Excellent) to Concord Specialty Insurance Company (Concord Specialty) (Pierre, SD). The outlook assigned to these Credit Ratings (ratings) is negative. Concurrently, AM Best has affirmed the FSR of A- (Excellent) and the Long-Term ICR of “a-” (Excellent) of Lexington National Insurance Corporation (Lexington National) (Stuart, FL). The outlook of these ratings is negative. Together these companies comprise Revolutionary Insurance Group (the group).
The ratings of Concord Specialty reflect its role as a member of Revolutionary Insurance Group and the explicit support provided to Concord Specialty through the implementation of a pooling agreement with Lexington National.
The ratings also reflect the group’s balance sheet strength, which AM Best assesses as very strong, as well as its adequate operating performance, limited business profile and appropriate enterprise risk management (ERM).
The group’s very strong balance sheet strength level is supported by its strongest level of risk-adjusted capitalization, as measured by Best’s Capital Adequacy Ratio (BCAR), and is offset somewhat by limited surplus growth due to annual stockholder dividends. The group’s limited business profile recognizes that the group is in the process of transitioning from a bail bond only surety to a multiline niche carrier. AM Best views Revolutionary Insurance Group’s ERM practices as appropriate for its risk profile.
The group’s negative outlook reflects moderate deterioration in its risk-adjusted capitalization along with increasing underwriting leverage metrics that lag AM Best’s fidelity & surety composite averages. The outlook also reflects the group’s decline in operating and underwriting results over the past five years, which have also lagged the composite average. However, the group’s underwriting performance has shown signs of improvement in the most recent years.
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 use of Best’s Credit Ratings, Best’s Performance Assessments, Best’s Preliminary Credit Assessments and AM Best press releases, please view Guide to Proper Use of Best’s Ratings & Assessments.
AM Best is a global credit rating agency, news publisher and data analytics provider specializing in the insurance industry. Headquartered in the United States, the company does business in over 100 countries with regional offices in London, Amsterdam, Dubai, Hong Kong, Singapore and Mexico City.