A.M. Best Revises Outlook to Positive for Transportation Property and Casualty Company Inc. [Manufacturing Close – Up]

A.M. Best Co. has revised the outlook to positive from stable and affirmed the financial strength rating of A- (Excellent) and issuer credit rating of "a-" of Transportation Property and Casualty Company Inc. (TPCC) (British Columbia, Canada).

The ratings are based on TPCC's excellent capitalization and operating performance and a strong enterprise risk management program. Also inuring to the benefit of the ratings is the captive's favorable profile as part of the South Coast British Columbia Transportation Authority (TransLink). Partially offsetting these positive rating factors are TPCC's relatively small scale of operations and high exposures.

TPCC is a pure captive insurance company that provides automobile physical damage, general liability and property insurance coverage solely to TransLink. TPCC has demonstrated its usefulness and effectiveness to TransLink over many years by providing flexibility for insurance program structuring and substantial insurance cost efficiencies. It is an integral part of its shareholder's existing projects and future planning.

Key rating drivers that could lead to an upgrading of TPCC's ratings are a stable underwriting performance as well as reduced overall net exposure over the next few years.

Factors that could lead to a negative outlook or a downgrading of the company's ratings are a material loss of capital from either claims or investments, a reduced level of capital that does not support the ratings or an increase in net retention. TPCC's ratings are somewhat linked to the rating of TransLink; therefore, unfavorable operating performance or material loss of capital could result in changes to the captive's ratings.

A.M. Best remains the leading rating agency of alternative risk transfer entities, with more than 200 such vehicles rated in the United States and throughout the world.

For current Best's Credit Ratings and independent data on the captive and alternative risk transfer insurance market, please visit www.ambest.com/captive.