The Credit Ratings (ratings) reflect LML’s strong and highly liquid balance sheet, consistently profitable operating performance, favorable loss reserve development, solid enterprise risk management framework and management’s long-standing expertise in North Carolina’s legal professional liability sector. The ratings also take into consideration the diversification benefit derived from the various areas of practice the company insures and its ability to adjust its exposure in each of these areas based on overall performance.
Partially offsetting these positive rating factors is the company’s limited business profile, writing one line of business, which subjects it to a higher degree of risk from fluctuations in the underwriting cycle, economic conditions in the state, changes in the housing market, and changes in North Carolina’s regulatory, legislative and judicial environments.
The balance sheet is strong and has strengthened in recent years due to organic surplus growth, lower loss reserves and modest premium risk growth. Underwriting leverage ratios also are favorable and showing improvement. The balance sheet is highly liquid, with a good mix of highly rated securities in the fixed income portfolio supplemented by non-affiliated common stock and affiliated investments.
This press release relates to Credit Ratings 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 see A.M. Best’s Recent Rating Activity web page. For additional information regarding the use and limitations of Credit Rating opinions, please view Understanding Best’s Credit Ratings.
Copyright © 2016 by A.M. Best Rating Services, Inc. and/or its subsidiaries. ALL RIGHTS RESERVED.
Senior Financial Analyst
Manager, Public Relations
Director, Public Relations