AM Best recently announced updated ratings for the Arbella Mutual Insurance group, the Concord Insurance Group and Quincy Mutual Group. The following is our press releases and company announcements with respect to the ratings update for each these three insurers, all of which have a significant presence in Massachusetts.
AM Best Revises Outlook to Postive for Arbella Insurance Group Members…
OLDWICK – SEPTEMBER 19, 2019 AM Best has revised the outlooks to positive from stable and affirmed the Financial Strength Rating of A- (Excellent) and the Long-Term Issuer Credit Ratings of “a-” of Arbella Mutual Insurance Company and its three pooled insurance entities: Covenant Insurance Company (Southbury, CT), Arbella Indemnity Insurance Company, and Arbella Protection Insurance Company. These companies are collectively known as Arbella Insurance Group (Arbella). All companies are domiciled in Quincy, MA unless otherwise specified.
The ratings of Arbella reflect the group’s balance sheet strength, which AM Best categorizes as very strong, as well as its adequate operating performance, neutral business profile and appropriate enterprise risk management (ERM).
The revised outlooks reflect Arbella’s strengthened risk-adjusted capitalization, supported by favorable trends in surplus growth and loss reserve development, as well as an enhanced reinsurance program. AM Best expects further improvement in risk-adjusted capitalization as the group continues to grow surplus through profitable operations and maintains its more robust reinsurance structure.
Additionally, the ratings reflect adequate operating performance, driven by key metrics that are relatively in line with the private passenger standard auto and homeowners composite five-year averages, inclusive of pre-tax return on revenue, combined ratio and operating ratio. The ratings also reflect Arbella’s business profile, which is considered neutral as the focused geographic concentration is partially offset by modest market share and a proven ability to effectively operate within its territories by capitalizing on enhanced data analytics and pricing schemes. Furthermore, the ERM program is appropriate for the risk profile of the organization.
AM Best Revises Outlooks to Positive for Concord Group Insurance Pool Members
Affirms Credit Ratings of Auto-Owners and Certain Subsidiaries
AM Best has revised the outlook to positive from stable and affirmed the Financial Strength Rating (FSR) of A (Excellent) and the Long-Term Issuer Credit Ratings (ICRs) of “a+” for New Hampshire-based Concord Group.
According to AM Best, “The ratings of Concord Group reflect its balance sheet strength, which AM Best categorizes as very strong, as well as its adequate operating performance, neutral business profile, appropriate enterprise risk management (ERM)… and strategic position within the Auto-Owners organization, which is a highly rated, super-regional insurer with more than $11 billion in policyholders’ surplus.”
“We are very pleased to have our Financial Strength Rating outlook revised from stable to positive,” said Dan McCabe, President and CEO, Concord Group Insurance. “It demonstrates that AM Best recognizes the continued progress our organization is making. This reinforces the dedication and hard work of a team committed to providing the best insurance products and services in New England.”
The outlooks have been revised to positive from stable and the FSR of A (Excellent) and the Long-Term ICRs of “a+” have been affirmed for the following members of Concord Group Insurance Pool:
- Concord General Mutual Insurance Company
- Green Mountain Insurance Company, Inc.
- State Mutual Insurance Company
- Sunapee Mutual Fire Insurance Company
- Vermont Accident Insurance Company, Inc.
The FSR of A++ (Superior) and the Long-Term ICRs of “aa+” have been affirmed, each with a stable outlook, for Auto-Owners Insurance Company and its wholly owned property and casualty subsidiaries. The Concord Group became affiliated with Auto-Owners Insurance Company in April 2017.
AM Best Revises Outlooks to Negative for Quincy Mutual Group Members
OLDWICK – SEPTEMBER 19, 2019 AM Best has revised the outlooks to negative from stable and affirmed the Financial Strength Rating of A+ (Superior) and the Long-Term Issuer Credit Ratings of “aa-” for the members of Quincy Mutual Group. The group includes the lead company, Quincy Mutual Fire Insurance Company (Quincy Mutual), along with New England Mutual Insurance Company (NEMIC) and Patrons Oxford Insurance Company (Patrons). Quincy Mutual and NEMIC are domiciled in Quincy, MA, while Patrons is domiciled in Portland, ME.
The group’s Credit Ratings (ratings) reflect its balance sheet strength, which AM Best categorizes as strongest, as well as its strong operating performance, neutral business profile and appropriate enterprise risk management (ERM).
The negative outlooks reflect deterioration in underwriting performance in recent years that has resulted in underwriting and operating metrics falling to a level more in line with the private passenger standard auto and homeowners composite average. Recent years have been adversely impacted by catastrophe and non-catastrophe assumed reinsurance programs. While results historically have benefited from the assumed programs, recent expansion and catastrophes have diminished the group’s overall key performance metrics.
The group’s strongest balance sheet strength is supported by its risk-adjusted capitalization being at the strongest level, as measured by Best’s Capital Adequacy Ratio (BCAR), favorable loss reserve development, strategic reduction in common stock leverage and underwriting leverage that is considerably below the composite. The group’s neutral business profile reflects historically profitable diversification achieved through the direct and assumed channels, as well as predictive analytics embedded within the decision-making and pricing processes. AM Best considers ERM as appropriate through utilization of a sophisticated capital model to help guide risk tolerances.
