AM Best has affirmed an A (Excellent) Financial Strength Rating and an a+ (Excellent) Long-Term Issuer Credit Rating for Electric Insurance Company (EIC), the insurance subsidiary of General Electric, according to a new press release. The ratings agency cited EIC’s balance sheet strength, operating performance, business profile and risk management in maintaining the positive ratings.
The announcement comes as GE aims to sell EIC in the first half of 2024 as part of its broader corporate restructuring. GE disclosed plans in November 2021 to split into three separate public companies focused on healthcare, energy and aviation. The healthcare unit was already spun off in Q1 2023 as GE Healthcare.
Originally, Electric was formed in 1966 to write personal insurance for GE employees as a subsidiary of Electric Mutual Liability Insurance. It later expanded to offer personal lines to the general public and commercial lines for GE and subsidiaries.
Key details on Electric Insurance:
- Provides commercial and personal lines coverage in all 50 states, Washington DC, Puerto Rico, Canada.
- Personal lines include auto, homeowners, umbrella, largely for current/former GE employees. Expanding through direct marketing and independent agents.
- Commercial lines primarily workers’ comp, commercial auto, and general liability for GE accounts. Most business is retrospectively rated.
- Four wholly-owned subsidiaries including captive insurer Elm Insurance Company.
Key highlights from AM Best’s press release:
- EIC’s balance sheet assessed as strongest, with risk-adjusted capital at highest level. Conservative reserving, investment income also credited.
- Adequate operating performance with consistent profitability over past decade. Underwriting volatility offset by investments.
- Pending sale will split EIC from GE energy and aviation businesses it currently supports.
- EIC remains focused on GE businesses until sale closes, while growing personal lines.
The affirmation of EIC’s strong ratings despite uncertainties from the pending sale reflects its solid capital and consistent earnings. AM Best seems unconcerned by the split from GE, though it will cut direct ties to most commercial lines. The agency will likely monitor execution of the sale and business mix shifts.
