AM Best Information Services

MAY 22, 2015 11:09 AM (EDT)

A.M. Best Revises Outlook to Positive for Ratings of Builders Insurance (A Mutual Captive Company) and Its Subsidiaries

 Robert Valenta
Senior Financial Analyst
(908) 439-2200, ext. 5291

Gerard Altonji
Assistant Vice President
(908) 439-2200, ext. 5626
Christopher Sharkey
Manager, Public Relations
(908) 439-2200, ext. 5159

Jim Peavy
Assistant Vice President, Public Relations
(908) 439-2200, ext. 5644


OLDWICK - MAY 22, 2015 11:09 AM (EDT)
A.M. Best has revised the outlook to positive from stable and affirmed the financial strength rating of A- (Excellent) and the issuer credit rating of "a-" of Builders Insurance (A Mutual Captive Company) and its wholly owned subsidiaries, American Builders Insurance Company (formerly known as Association Insurance Company) and National Builders Insurance Company (formerly known as Vinings Insurance Company), collectively referred to as Builders. All companies are headquartered in Atlanta, GA.

The ratings action reflects Builders' strong risk-adjusted capitalization, historically profitable operating performance, generally favorable loss reserve development trends and established market presence providing workers' compensation and general liability coverage, primarily to the home building industry in Georgia and other states ranging from the Mid-Atlantic to the South, Midwest and West. Additionally, the ratings reflect the group's prudent risk selection process, effective loss control practices and proactive claims management, which contribute to historically strong business retention. These positive rating factors are partially offset by Builders' relatively limited product line spread and concentration of business in the building industry, particularly in states where the home building downturn was most pronounced.

The outlook is based on the group's strong capitalization and the expectation of organic surplus growth through profitable operations over the near term. Future positive rating actions may result if the group continues to generate consistent and profitable underwriting results for an extended period of time. However, negative rating actions could result if operating performance falls markedly short of A.M. Best's expectation or if risk-adjusted capitalization declines significantly.

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 .

Key insurance criteria reports utilized:

  • Catastrophe Analysis in A.M. Best Ratings

  • Equity Credit for Hybrid Securities

  • Rating Members of Insurance Groups

  • Risk Management and the Rating Process for Insurance Companies

  • The Treatment of Terrorism Risk in the Rating Evaluation

  • Understanding BCAR for Property/Casualty Insurers

This press release relates to rating(s) 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 visit A.M. Best's Ratings & Criteria Center.

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