Best’s News & Research Service - March 07, 2024 11:07 AM (EST)
AM Best Upgrades Credit Ratings of Broome Co-operative Insurance Company
- March 07, 2024 11:07 AM (EST)
//BestWire// - AM Best has upgraded the Financial Strength Rating to A (Excellent) from A- (Excellent) and the Long-Term Issuer Credit Rating to “a” (Excellent) from “a-” (Excellent) of Broome Co-operative Insurance Company (Broome) (Vestal, NY). The outlooks of these Credit Ratings (ratings) have been revised to stable from positive.
The ratings reflect Broome’s balance sheet strength, which AM Best assesses as very strong, as well as its strong operating performance, limited business profile and appropriate enterprise risk management (ERM).
The rating upgrades reflect Broome’s consistent underwriting results in recent years aided by its pure loss ratio, which favorably compares relative to the industry composite average by approximately 25 percentage points, but is partially offset by an elevated underwriting expense ratio, primarily driven by higher commissions afforded to the agents to retain profitable business. Furthermore, Broome has reported profitable pre-tax and total return measures that favorably compare relative to the composite averages on a five and 10-year average basis. This is largely driven by favorable operating earnings, which are due to improved underwriting performance because of the profitability initiatives implemented by management, such as rate increases, higher deductibles and strict underwriting guidelines, among others. This favorable trend is expected by AM Best to continue going forward. In addition, the company’s consistent operating performance metrics can be attributed to its technology enhancements, solid agency relationships, target markets, territorial and production expansion, as well as excellent claim services and management capabilities.
Broome maintains a limited business profile assessment due to its narrow profile in the state of New York, which exposes its earnings and policyholders’ surplus to weather-related events, competitive market conditions and macroeconomic factors.
AM Best considers Broome’s ERM program to be appropriate for its size and scope of operations, which allows it to monitor its concentration of risks and purchase reinsurance to mitigate them.
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.