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FOR IMMEDIATE RELEASE
OLDWICK - JUNE 23, 2022 11:42 AM (EDT)
AM Best has revised the outlooks to stable from negative and affirmed the Financial Strength Rating of A- (Excellent) and the Long-Term Issuer Credit Rating of “a-” (Excellent) of Southern Trust Insurance Company (Southern Trust) (Macon, GA).
These Credit Ratings (ratings) reflect Southern Trust’s balance sheet strength, which AM Best assesses as very strong, as well as its adequate operating performance, limited business profile and appropriate enterprise risk management (ERM).
The revised outlooks to stable reflect Southern Trust’s capital growth in recent years primarily driven by underwriting income and capital gains. Furthermore, management has implemented several initiatives to curb adverse loss reserve development. These include continued reserve strengthening, as well as, several internal changes in claims handling and litigation management. Collectively, these efforts have started to gain traction and are expected to mitigate future adverse loss reserve development. Additionally, the company implemented a 50/50 quota share reinsurance agreement covering its private passenger auto and commercial auto physical damage lines of business, which will provide surplus relief in 2022.
Over the past three years, Southern Trust’s operating performance has been profitable despite some volatility due to weather-related events. The company’s underwriting results have benefited from various underwriting initiatives, including rate increases, enhanced underwriting guidelines and re-inspections. Southern Trust’s business profile is considered limited based on its narrow geographic focus and relative market position within its operating territory. Recent emphasis has been placed on improving the company’s geographic spread within its operating territory and controlled growth in its commercial lines business. AM Best considers Southern Trust’s ERM program to be appropriate for its size and scope of operations.
This press release relates to Credit Ratings that have been published on AM 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 AM Best’s Recent Rating Activity web page. For additional information regarding the use and limitations of Credit Rating opinions, please view Guide to Best’s Credit Ratings. For information on the proper use of Best’s Credit Ratings, Best’s Performance Assessments, Best’s Preliminary Credit Assessments and AM Best press releases, please view Guide to Proper Use of Best’s Ratings & Assessments.
AM Best is a global credit rating agency, news publisher and data analytics provider specializing in the insurance industry. Headquartered in the United States, the company does business in over 100 countries with regional offices in London, Amsterdam, Dubai, Hong Kong, Singapore and Mexico City.