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FOR IMMEDIATE RELEASE
OLDWICK, N.J. - NOVEMBER 26, 2008 12:00 AM (EST)
A.M. Best Co. has removed from under review with negative implications and affirmed the financial strength rating (FSR) of B++ (Good) and the issuer credit ratings (ICR) of "bbb" of the Palisades Group (Palisades) (Berkeley Heights, NJ) and its members. The ratings have been assigned a stable outlook.
Concurrently, A.M. Best has removed from under review with negative implications and affirmed the financial strength rating FSR of B++ (Good) and ICRs of "bbb" of the High Point companies (Red Bank, NJ). The outlook assigned to these ratings is stable.
Additionally, A.M. Best has removed from under review with negative implications and affirmed the ICR of "bb" on National Atlantic Holdings Corporation. Subsequently, A.M. Best has withdrawn the rating and assigned an "nr" as the company has filed for dissolution.
The ratings reflect Palisades Group's adequate risk-adjusted capitalization, favorable operating earnings and well-established market position as a leading writer of personal lines business in New Jersey. Partially offsetting these positive rating factors are the group's elevated underwriting leverage position and business concentration in New Jersey. This concentration exposes the group to potential catastrophic weather-related losses, unfavorable judicial decisions, regulatory actions and increasing competitive pressures.
The group's positive operating income over the latest five-year period was generated as a direct result of its steady investment income, focused operating strategy and knowledge of local market conditions. The outlook reflects the group's level of risk-adjusted capitalization, operating income and position within the New Jersey insurance market.
The ratings also consider the August 1, 2008 acquisition of Proformance Insurance Company, a New Jersey-domiciled, personal lines carrier (renamed Palisades Property Casualty Insurance Company). Upon closing, Palisades streamlined claim handling processes and strengthened loss and LAE reserves. As a result of this transaction, Palisades will gain increased market share, become the largest independent agent carrier in New Jersey, create expense synergies and strengthen its competitive position in the state.
The Palisades Group is comprised of Palisades Safety and Insurance Association, the lead company, and its following wholly-owned subsidiaries:
Palisades Insurance Company
Palisades Property and Casualty Insurance Company
High Point Preferred Insurance Company
High Point Property and Casualty Insurance Company
High Point Safety and Insurance Company
Twin Lights Insurance Company
Teachers Auto Insurance Company of New Jersey
For Best's Ratings, an overview of the rating process and rating methodologies, please visit Best's Rating Center.
Founded in 1899, A.M. Best Company is a global full-service credit rating organization dedicated to serving the financial and health care service industries, including insurance companies, banks, hospitals and health care system providers.