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Best’s News & Research Service - March 09, 2023 04:20 PM (EST)

AM Best Downgrades Credit Ratings of Auto Club Florida Group’s Members; Affirms Credit Ratings of Auto Club Group’s Members

  • March 09, 2023 04:20 PM (EST)
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Oldwick //BestWire// - AM Best has downgraded the Financial Strength Rating (FSR) to A- (Excellent) from A (Excellent) and the Long-Term Issuer Credit Ratings (Long-Term ICR) to “a-” (Excellent) from “a” (Excellent) of Auto Club Insurance Company of Florida and Auto Club South Insurance Company. Together these companies form Auto Club Florida Group (Auto Club Florida) and are domiciled in Tampa, FL. The outlook of these Credit Ratings (ratings) has been revised to negative from stable. Concurrently, AM Best has affirmed the FSR of A (Excellent) and the Long-Term ICRs of “a” (Excellent) of Auto Club Insurance Association (ACIA) (Dearborn, MI) and its wholly owned subsidiaries and affiliates, which are collectively referred to as Auto Club Group (ACG). The outlook of these ratings is stable. See below for a listing of companies.

The ratings of Auto Club Florida reflect its balance sheet strength, which AM Best assesses as strong, as well as its adequate operating performance, limited business profile and appropriate enterprise risk management (ERM).

Despite recent parental capital contributions, the rating downgrades of Auto Club Florida reflect its weakened balance sheet strength following recent storm loss activity. The revised outlooks to negative from stable reflect the deterioration in the group’s operating performance following the impact of catastrophe losses given its limited business profile and, to a lesser extent, the emergence of adverse reserve development in recent calendar years.

The ratings of Auto Club Florida also consider AM Best’s assessment of the financial support afforded by its ownership group (ACIA, 90% ownership and ACG, 10% ownership). Both ACIA and ACG have pledged to support ongoing growth and operations as needed. Following recent storm loss activity, capital has been called into the group at ownership’s discretion in accordance with management’s capital risk tolerance framework.

The ratings of ACG reflect its balance sheet strength, which AM Best assesses as very strong, as well as its adequate operating performance, neutral business profile and appropriate ERM.

The FSR of A (Excellent) and the Long-Term ICRs of “a” (Excellent) have been affirmed, with stable outlooks, for the following members of Auto Club Group:

  • Auto Club Insurance Association

  • MemberSelect Insurance Company

  • Auto Club Property-Casualty Insurance Company

  • Auto Club Group Insurance Company

  • Meemic Insurance Company

  • Fremont Insurance Company

  • The Members Insurance Company

  • Universal Insurance Company

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.

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