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FOR IMMEDIATE RELEASE
OLDWICK, N.J. - JUNE 19, 2012 12:00 AM (EDT)
A.M. Best Co. has upgraded the issuer credit rating to “bbb+” from “bbb” and affirmed the financial strength rating of B++ (Good) of Prime Insurance Company (PIC) (Chicago, IL). The outlook for both ratings is stable.
This ICR upgrade reflects PIC’s sustained profitability, low net leverage and established market profile as a surplus lines insurer with a diversified distribution platform. PIC’s business is well spread and focused on the underserved, niche non-commodity type markets that produce underwriting profit. The ratings also recognize the continued, albeit marginal, reduction in the financial leverage position at the parent company, Prime Holdings Insurance Services, Inc., and the expectation of continued improvement in the future via retained earnings and growth in equity.
Rating triggers that could prompt positive rating actions on PIC’s ratings would be a continued reduction in holding company financial leverage, sustained profitability, improved retained earnings and the maintenance of strong risk-adjusted capital.
Rating triggers that could cause a rating downgrade include any additional strain or potential call on capital caused by the parent, the inability to sustain healthy profit margins in the future and the emergence of any unforeseen risk, which could materially weaken capital and/or alter profit prospects in the future.
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.
Founded in 1899, A.M. Best Company is the world’s oldest and most authoritative insurance rating and information source.