OLDWICK, N.J.--(BUSINESS WIRE)--
A.M. Best Co. has revised the outlook to positive from stable and
affirmed the financial strength rating of A- (Excellent) and issuer
credit ratings of “a-” of FCCI Insurance Company, and its wholly
owned subsidiaries, Brierfield Insurance Company (Ridgeland, MS), FCCI
Commercial Insurance Company, FCCI Advantage Insurance Company
(both domiciled in Sarasota, FL), Monroe Guaranty Insurance Company
and National Trust Insurance Company (both domiciled in Carmel,
IN), operating collectively as FCCI Insurance Group(FCCI).
The revised outlook reflects FCCI’s strong risk-adjusted capitalization,
consistently solid operating performance, conservative loss reserve
philosophy and solid position within the Florida property/casualty
marketplace. The ratings also reflect FCCI’s successful diversification
into additional lines and states over the past ten years. These
strengths reflect FCCI’s commitment to underwriting fundamentals,
long-standing relationships with its agents, strong medical management
capabilities, extensive loss control procedures and its advanced use of
technology and sophisticated predictive analytic modeling tools.
Partially offsetting these positive rating factors are FCCI’s moderately
high expense ratio over the recent five-year period and somewhat
concentrated business profile. While management has continued with its
geographic expansion and diversification efforts, FCCI’s market profile
remains geographically concentrated with more than half of its premium
writings derived from Florida. In addition, workers’ compensation still
makes up a significant portion of FCCI’s total book of business, and
underwriting results in this line have weakened in recent years, driven
by competitive market conditions, a weak macroeconomic environment and
the accumulation of state-mandated workers’ compensation rate reductions
occurring in Florida. Despite recent rate increases, the workers’
compensation line remains challenged, although these concerns are
mitigated by FCCI’s conservative underwriting and reserving practices.
Factors that could lead to positive ratings movement include the
continuation of FCCI’s consistent and solid operating earnings while
maintaining a conservative balance sheet and excellent risk-adjusted
capitalization. Factors that could lead to negative rating actions
include a trend of increasingly deteriorating underwriting and operating
performance or an erosion of surplus to an extent that causes a
significant decline in risk-adjusted capitalization.
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. Key criteria
utilized include: “Rating Members of Insurance Groups”; “Risk Management
and the Rating Process for Insurance Companies”; “Catastrophe Analysis
in A.M. Best’s Ratings”; “The Treatment of Terrorism Risk in the Rating
Evaluation”; and “Understanding BCAR for Property/Casualty Insurers.”
Best’s Credit Rating Methodology can be found at www.ambest.com/ratings/methodology.
Founded in 1899, A.M. Best Company is the world’s oldest and most
authoritative insurance rating and information source. For more
information, visit www.ambest.com.
Copyright © 2012 by A.M. Best Company, Inc. ALL RIGHTS RESERVED.
A.M. Best Co.
Michael Lagomarsino, CFA
Assistant
Vice President
(908) 439-2200, ext. 5810
michael.lagomarsino@ambest.com
or
Andrew
Colannino
Vice President
(908) 439-2200, ext.
5706
andrew.colannino@ambest.com
or
Rachelle
Morrow
Senior Manager, Public Relations
(908)
439-2200, ext. 5378
rachelle.morrow@ambest.com
or
Jim
Peavy
Assistant Vice President, Public Relations
(908)
439-2200, ext. 5644
james.peavy@ambest.com
Source: A.M. Best Co.
| Copyright: | Copyright Business Wire 2012 |
| Wordcount: | 482 |
