The ratings of
These positive factors are somewhat offset by the payment of significant stockholder dividends to AFG over the recent five-year period, elevated common stock leverage and adverse loss development in certain lines of business. While
Mid-Continent's ratings reflect its solid risk-adjusted capitalization, very strong operating performance achieved over the long term and successful position within its targeted markets. The group's favorable underwriting and operating results reflect management's proven product knowledge, focus on accurate pricing, and commitment to conservative reserving standards. The group also benefits from the financial flexibility provided by its ultimate parent, AFG.
These positive rating factors are partially offset by the significant stockholder dividends paid to AFG, which has reduced policyholder surplus during the recent five-year period, and the group's relatively limited geographic spread of business.
American Empire's ratings acknowledge its risk-adjusted capitalization, strong operating performance over the long term within the excess and surplus lines marketplace, and the successful track record of the executive team in managing operations through all phases of the market cycle. American Empire's strong operating performance reflects the highly profitable underwriting results, a low-cost operating structure and solid investment income despite a reduction in the invested asset base. The group's underwriting results are reflective of management's disciplined underwriting approach, pricing integrity and strong product and market knowledge. The ratings also reflect the benefits of the financial flexibility provided by its ultimate parent, AFG.
These positive rating factors are partially offset by the demonstrated sensitivity of the group's premium volume to the property/casualty market cycle, the impact of reduced premium on operating results and the significant level of stockholder dividends paid during the recent five-year period.
The ratings of Republic Indemnity are based on its historically strong operating performance, solid capitalization achieved through profitable operations and the executive management team's successful track record in managing operations through all phases of the market cycle, primarily within
These positive rating factors are somewhat offset by the downturn in underwriting performance in recent years relative to the group's historical profitability levels, an elevated underwriting expense measure that has increased as premium volume declined, the cumulative impact of stockholder dividends paid to AFG, and the group's concentrated business risk, operating as a monoline workers' compensation insurer with a high concentration of premium volume in
AFG's total debt to total capital (excluding accumulated other comprehensive income) and interest coverage ratios remain within
Positive rating actions could be taken on the ratings of AFG's property/casualty subsidiaries if operating results remain in line with higher rated peers in the commercial casualty composite while maintaining a strong level of risk-adjusted capitalization. Positive actions on the ratings of AFG could result from favorable actions on the ratings of its key subsidiaries.
Key factors that could trigger negative rating actions on the group's ratings include a material deterioration of underwriting and operating results, particularly if the resulting performance is materially below similarly rated peers, which results in weakening in risk-adjusted capitalization below
For a complete listing of
The methodology used in determining these ratings is Best's Credit Rating Methodology, which provides an explanation of
Founded in 1899,
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