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FOR IMMEDIATE RELEASE
OLDWICK - SEPTEMBER 22, 2017 11:51 AM (EDT)
A.M. Best has upgraded the Financial Strength Rating to A (Excellent) from A- (Excellent) and the Long-Term Issuer Credit Rating to “a” from “a-” of Prime Insurance Company (PIC) (Chicago, IL). The outlook of these Credit Ratings (ratings) has been revised to stable from positive.
The ratings apply to PIC and are based on the consolidation of PIC and its wholly owned subsidiary, Prime Property & Casualty Insurance Inc. (PP&C), collectively known as Prime Insurance Group (Prime).
The rating upgrades are based on the group’s continued excellent underwriting profitability and strong risk-adjusted capitalization to support new growth initiatives in its specialty insurance niche focused on the excess and surplus (E&S) lines market. Underwriting and claims management under its proprietary working model have generated historically strong profitability and loss experience, facilitated by partnership with reinsurance partners who purchase capital directly to profit share in results, while enhancing Prime’s financial flexibility via favorable quota share arrangements. The outlooks reflect A.M. Best’s expectations that initiatives will continue to be well-managed.
The ratings reflect Prime’s supportive capitalization, favorable operating profitability, demonstrated underwriting acumen and partnership with RLI Insurance Company via reinsurance and equity ownership, and the concurrent reduction in financial leverage at the parent company, Prime Holdings Insurance Services, Inc. These positive attributes are partially offset by Prime’s fluctuating premium volume, typical of an opportunistic E&S underwriting company that looks for under-served areas in the insurance market.
Positive rating action is unlikely in the near term. In the medium term, positive rating action could occur if Prime continues its excellent underwriting profitability or if it materially improves its risk-adjusted capitalization. Negative rating action could occur if it experiences significant weakness in underwriting performance trends or a material reduction in capitalization adequacy due to weak underwriting results or excessive growth.
This press release relates to Credit Ratings that have been published on A.M. 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 A.M. Best’s Recent Rating Activity web page. For additional information regarding the use and limitations of Credit Rating opinions, please view Understanding Best’s Credit Ratings. For information on the proper media use of Best’s Credit Ratings and A.M. Best press releases, please view Guide for Media - Proper Use of Best’s Credit Ratings and A.M. Best Rating Action Press Releases.
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