Arbella is headquartered in Quincy
AM Best has revised the outlook to positive from stable for the Long-Term Issuer Credit Ratings (Long-Term ICRs) and affirmed the Financial Strength Rating (FSR) of A (Excellent) and the Long-Term ICRs of “a” (Excellent) of Arbella Mutual Insurance Company and its three pooled insurance entities: Arbella Protection Insurance Company, Arbella Indemnity Insurance Company and Covenant Insurance Company (Farmington, CT). These companies are collectively known as Arbella Insurance Group (Arbella). The outlook of the FSR is stable. All companies are domiciled in Quincy, MA, unless otherwise specified.
The Credit Ratings (ratings) reflect Arbella’s balance sheet strength, which AM Best assesses as very strong, as well as its adequate operating performance, neutral business profile and appropriate enterprise risk management (ERM).
The revised Long-Term ICR outlook to positive from stable is based on Arbella’s key operating performance metrics coming into line with strong assessed rating units within its private passenger standard auto and homeowners composite on both a five-year and 10-year average basis. Additionally, Arbella has reported significantly improved underwriting results and operating performance in 2024, which were driven by management’s numerous pricing, underwriting and claims initiatives.
Arbella maintains very strong balance sheet strength, reflective of its strongest level of risk-adjusted capitalization, as measured by Best’s Capital Adequacy Ratio (BCAR), modest underwriting leverage measures relative to its composite, strong liquidity measures, consistently favorable loss reserve development and a conservative investment risk profile. The balance sheet is protected from significant weather-related events through a comprehensive catastrophe reinsurance program. The group’s risk-adjusted capitalization has trended upward recently from exposure reduction initiatives and increased catastrophe reinsurance coverage purchases.
AM Best assesses Arbella’s business profile as neutral, reflective of its long-standing market presence and market expertise in Massachusetts, strong distribution network and experienced management team. Arbella’s ERM is assessed as appropriate for its risk profile, which is driven by its established ERM structure, refined risk management processes and comprehensive reinsurance program, which mitigates tail risk.
