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FOR IMMEDIATE RELEASE
OLDWICK, N.J. - MAY 15, 2013 12:00 AM (EDT)
A.M. Best Co. has upgraded the financial strength rating (FSR) to A- (Excellent) from B++ (Good) and the issuer credit rating (ICR) to “a-” from “bbb+” of Versant Life Insurance Company (VLIC).
Concurrently, A.M. Best has affirmed the FSR of A- (Excellent) and the ICRs of “a-” of Loss Deficiency Surety Insurance Company, Inc. (LDSIC), Versant Casualty Insurance Company (VCIC), First Assurance Life of America (FAL), Performance Life of America (PLA) as well as the parent company, Louisiana Dealer Services Insurance, Inc. (LDS). All companies are headquartered in Baton Rouge, LA. The outlook for all ratings is stable.
The upgrading of the ratings for VLIC recognizes its role as part of a larger combined group of companies within LDS that operate only in the Mississippi market, its adequate capitalization, stable earnings and a strong balance sheet, which is well matched and of short duration with strong liquidity.
The rating affirmations of LDS reflect its supportive capitalization, historical profitability and established market position as a Louisiana mechanical breakdown insurer. The rating affirmations of LDSIC and VCIC acknowledge their low underwriting leverage, favorable operating performance and the financial support provided by LDS. The ratings also recognize each company’s role within the group, the purposes they serve in their respective states, as well as the inherent benefits afforded by common management, marketing and shared services.
While recognizing the group’s solid capital position and consistent profitability, A.M. Best notes that growth within the enterprise depends upon the health and strength of the economy, specifically domestic auto sales. A.M. Best also notes that while auto sales have improved over the past two years, a potential decrease in consumer activity could adversely impact the potential opportunities to market these companies’ core credit products.
A.M. Best believes the companies are well positioned at their current rating levels. Negative rating actions could occur if the companies’ capitalization and/or operating performance fall markedly short of A.M. Best’s expectations. Negative rating pressure also could occur if the business profile and/or the relative importance of any of the insurance companies changes materially.
The methodology used in determining these ratings is Best’s Credit Rating Methodology, which provides a comprehensive explanation of A.M. Best’s rating process and contains the different rating criteria employed in the rating process. Best’s Credit Rating Methodology can be found at www.ambest.com/ratings/methodology.
A.M. Best Company is the world’s oldest and most authoritative insurance rating and information source.