AM Best


A.M. Best Assigns Ratings to Greenpath Insurance Company


CONTACTS:


Kenneth Tappen
Senior Financial Analyst
(908) 439-2200, ext. 5248
kenneth.tappen@ambest.com

Joseph Burtone
Assistant Vice President
(908) 439-2200, ext. 5125
joseph.burtone@ambest.com


Christopher Sharkey
Manager, Public Relations
(908) 439-2200, ext. 5159
christopher.sharkey@ambest.com

Jim Peavy
Assistant Vice President, Public Relations
(908) 439-2200, ext. 5644
james.peavy@ambest.com

FOR IMMEDIATE RELEASE

OLDWICK - SEPTEMBER 04, 2014 11:14 AM (EDT)
A.M. Best has assigned a financial strength rating (FSR) of B+ (Good) and an issuer credit rating (ICR) of "bbb-" to Greenpath Insurance Company (Greenpath) (Rancho Cordova, CA). The outlook assigned to both ratings is stable.

The ratings and outlook reflect Greenpath's sound business plan, solid risk-adjusted capitalization and in-depth knowledge of California's private passenger non-standard automobile market. Partially offsetting these positive rating factors are the company's limited product and geographic focus and execution risk as a new company attempting to gain market share and expand its geographic presence.

Greenpath maintains solid risk-adjusted capitalization due to its relatively conservative underwriting and investment leverage measures. In addition, the company benefits from senior management's successful track record in California's private passenger non-standard automobile market. Greenpath's management has successfully overseen profitable automobile insurance products and sold in the California and national marketplace for many years. Furthermore, the company is technologically advanced and utilizes predictive analytics as a road map for decision making with a heavy emphasis on managing loss frequency. Data warehouse design provides for multivariate data review, analysis and pricing of risks.

Partially offsetting these positive ratings factors is the execution risk associated with growing a private passenger non-standard automobile book of business, a segment in which smaller insurance writers have experienced a material deterioration in operating results and surplus in recent years. This deterioration has been driven by economic conditions, significant price competition and adverse selection from large personal automobile writers with greater scale and pricing granularity. However, Greenpath management's history of solid performance in the private passenger non-standard automobile market somewhat mitigates the associated execution risk.

While A.M. Best believes Greenpath's ratings and outlook are well positioned at current levels, factors that may lead to positive rating actions include a trend of positive operating and underwriting profitability that outperforms A.M. Best's private passenger non-standard auto composite, while enhancing capitalization through organic surplus growth. Factors that could lead to negative rating actions include a material deviation from management's projections, a lack of underwriting discipline that deteriorates its underwriting and operating performance to a level below its peers or an erosion of surplus that causes a significant decline in risk-adjusted capitalization.

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.


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