Best’s News & Research Service - October 27, 2023 02:05 PM (EDT)
AM Best Affirms Credit Ratings of Atlantic Casualty Ins Co, Certain Affiliates, Subs; Revises Outlooks for Auto-Owners Ins Group
- October 27, 2023 02:05 PM (EDT)
Oldwick //BestWire// - AM Best has affirmed the Financial Strength Rating (FSR of A+ (Superior) and the Long-Term Issuer Credit Rating (Long-Term ICR of “aa-” (Superior) of Atlantic Casualty Insurance Company (Atlantic Casualty) (Goldsboro, NC). AM Best also has affirmed the FSR of A- (Excellent) and the Long-Term ICR of “a-” (Excellent) of Auto-Owners Specialty Insurance Company (AOSIC) (Dover, DE). In addition, AM Best has affirmed the FSR of A+ (Superior) and the Long-Term ICR of “aa-” (Superior) of Auto-Owners Life Insurance Company (AOLIC) (Lansing, MI), which is also a wholly owned subsidiary of Auto-Owners Insurance Company (Auto-Owners) (Lansing, MI). In addition, AM Best has affirmed the FSR of A+ (Superior) and the Long-Term ICRs of “aa-” (Superior) of the members of Concord Group Insurance Companies (Concord Group), which is led by Concord General Mutual Insurance Company (Concord General) (Concord, NH). The outlook of these Credit Ratings (ratings) is stable.
Concurrently, AM Best has revised the outlooks to negative from stable and affirmed the FSR of A++ (Superior) and the Long-Term ICR of “aa+” (Superior) of Auto-Owners and its four wholly owned property/casualty (P/C) companies that compose Auto-Owners Insurance Group (AOIG). At the same time, AM Best has revised the outlook to positive from stable for the Long-Term ICR and affirmed the FSR of A (Excellent) and the Long-Term ICR of “a” (Excellent) of California Capital Insurance Company (Monterey, CA) and its subsidiaries, which operate under an intercompany pooling arrangement, collectively referred to as Capital Insurance Group (Capital). The outlook of the FSR is stable. (See below for a detailed listing of the companies).
The ratings of AOIG reflect its balance sheet strength, which AM Best assesses as strongest, as well as its very strong operating performance, favorable business profile and appropriate ERM. Although AOIG had historically generated very strong operating performance, its recent trend has reversed due to weather-related events, as well as similar challenging market conditions faced by its peers. Management continues to proactively implement initiatives to reduce volatility and enhance its operating performance. AOIG continues to be resourceful and leverage its expertise in other operational areas, including asset management and innovation. AOIG also has an interactive ERM program, which is standardized for all rating units in the organization.
The ratings of Atlantic Casualty reflect its balance sheet strength, which AM Best assesses as strongest, as well as its adequate operating performance, neutral business profile and appropriate ERM. As a surplus lines carrier, Atlantic Casualty offers innovative products that add diversity to the organization’s overall book of business. It has also experienced rapid new business growth and continues to reinvest in its systems to remain efficient and meet customers’ expectations. As with other rating units within the Auto-Owners organization, Atlantic Casualty continues to receive explicit support from its parent during its rapid expansion phase.
The ratings of AOSIC reflect its balance sheet strength, which AM Best assesses as very strong, as well as its adequate operating performance, very limited business profile and appropriate ERM. AOSIC serves as a potential source of specialty business for the overall organization. Thus far, new business growth has been limited but future growth remains a primary focus.
The ratings of AOLIC reflect its balance sheet strength, which AM Best assesses as very strong, as well as its strong operating performance, neutral business profile and appropriate ERM. Although small in magnitude relative to other entities within the organization, AOLIC is strategically important to the organization as it provides cross-selling opportunities by offering life and annuity products to new and existing Auto-Owners’ customers. These products provide diversification outside of the property/casualty space and support business retention throughout the organization.
The ratings of Concord Group reflect its balance sheet strength, which AM Best assesses as strongest, as well as its adequate operating performance, neutral business profile and appropriate ERM. As a regional carrier, Concord focuses on providing personal and commercial lines products to four states within the New England region. In addition to enhancing the organization’s diversification strategy, Concord produces consistent profitable growth.
The ratings of Capital reflect its balance sheet strength, which AM Best assesses as very strong, as well as its marginal operating performance, neutral business profile and appropriate ERM. As a regional carrier with exposure heavily concentrated in California, Capital previously had faced challenges from wildfire exposure. As a result of de-risking initiatives, Capital now manages this exposure adequately, as evidenced by improving underwriting results over the last few years. Their geographic footprint and product offering also serves to complement that of the greater Auto-Owners organization.
The FSR of A+ (Superior) and the Long-Term ICRs of “aa-” (Superior) have been affirmed with stable outlooks for the following members of Concord Group Insurance Companies:
- Concord General Mutual Insurance Company
- Green Mountain Insurance Company, Inc.
- State Mutual Insurance Company
- Sunapee Mutual Fire Insurance Company
- Vermont Accident Insurance Company, Inc.
The FSR of A++ (Superior) and the Long-Term ICRs of “aa+” (Superior) have been affirmed with the outlooks revised to negative from stable for Auto-Owners Insurance Company and the following wholly owned P/C subsidiaries:
- Home-Owners Insurance Company
- Owners Insurance Company
- Property-Owners Insurance Company
- Southern-Owners Insurance Company
The FSR of A (Excellent) and the Long-Term ICR of “a” (Excellent) have been affirmed with the outlook of the Long-Term ICR revised to positive from stable and the outlook of the FSR maintained as stable for the following members of Capital Insurance Group:
- California Capital Insurance Company
- Eagle West Insurance Company
- Monterey Insurance Company
- Nevada Capital 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.