A.M. Best Affirms Ratings of The Travelers Companies, Inc. and Its Subsidiaries
Concurrently,
The rating affirmations reflect Travelers’ solid risk-adjusted capitalization, trend of favorable operating and underwriting results, excellent market profile in commercial and personal lines (largely distributed through independent agents) and effective management team. The ratings also acknowledge Travelers’ proactive and comprehensive risk management, underwriting and financial discipline, relatively conservative investment portfolio, geographic and product diversification and enhanced technology and internal information systems, which have improved its underwriting effectiveness and ability to service agents and customers in both commercial and personal lines. In addition, Travelers’ superior product breadth, industry leading data and analytics and leading position within its distribution network have enabled it to report a trend of strong earnings that have outperformed the majority of its peers over time. This has occurred despite an increase in weather-related losses and the current low interest rate environment.
Travelers’ ratings also consider the financial flexibility and liquidity provided by TRV. Despite significant share repurchases since 2006, TRV maintained
Offsetting these positive rating factors are the ongoing competitive environment within the property/casualty markets and Travelers’ exposure to natural and man-made catastrophes. Being among the largest commercial and personal insurers and national property writers, the group has significant exposure to natural catastrophes, which was evident in 2011 and 2012, and potential terrorist-related losses. Further, personal auto performance has underperformed in certain years, but appears to have stabilized as a result of expense reduction initiatives, as well as the introduction of Quantum 2.0. Travelers has comprehensive reinsurance and risk management programs in place to manage its spread of risk and limit its overall exposure. Despite reporting an increased level of catastrophe loss activity in 2011 and 2012, Travelers managed to report solid returns while maintaining strong liquidity and risk-adjusted capitalization, which is a testament to the group’s conservative operating philosophy, strong business profile and comprehensive risk management program.
Like other leading carriers within the U.S. property/casualty industry, Travelers remains exposed to the potential development of asbestos and environmental (A&E) liabilities; however, in more recent years, it has seen less adverse A&E reserve development emerge. Over the past several years, the group has experienced significant favorable prior year loss reserve development in the majority of both its personal and commercial lines reserves.
The ratings of TCSA and TCSCE primarily recognize TCSA’s strong risk-adjusted capitalization, specialized underwriting expertise, highly favorable underwriting and operating performance and leadership position in the surety, fidelity and management liability segments. These strengths are partially offset by TCSA’s limited product diversification as well as the negative impact that continued competitive property/casualty markets and challenging macroeconomic conditions may have on premium and profitability levels.
The ratings of
The ratings of Dominion reflect its good risk-adjusted capitalization; excellent brand recognition; established Canadian market presence nationally, but most notably in
The ratings of Premier acknowledge its strong risk-adjusted capitalization, historically favorable operating profitability and the additional operational support and financial flexibility afforded by Travelers and TRV. These positive rating factors are partly offset by the deterioration in Premier’s underwriting results earlier in most recent five-year period, geographic concentration of business in
The ratings of First Floridian recognize its strong risk-adjusted capitalization, trend of highly profitable operating results in recent years, operating efficiencies and local market focus, which enables it to respond effectively to issues associated with Florida’s personal lines market, and the additional operational support and financial flexibility afforded by Travelers and TRV. Partially offsetting these strengths are First Floridian’s exposure to catastrophe losses, albeit declining, and single state geographic concentration in
While
For a complete listing of
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. Best’s Credit Rating Methodology can be found at www.ambest.com/ratings/methodology.
Key insurance criteria reports utilized:
- Catastrophe Analysis in A.M. Best Ratings
- Equity Credit for
Hybrid Securities - Gauging the Basis Risk of Catastrophe Bonds
-
Insurance Holding Company and Debt Ratings - Rating Members of Insurance Groups
- Rating Surety Companies
- Risk Management and the Rating Process for Insurance Companies
- The Treatment of Terrorism Risk in the Rating Evaluation
- Understanding BCAR for Canadian Property/Casualty Insurers
- Understanding BCAR for Property/Casualty Insurers
- Understanding Universal BCAR
This press release relates to rating(s) that have been published on
Copyright © 2015 by A.M. Best Company, Inc. ALL RIGHTS RESERVED.
View source version on businesswire.com: http://www.businesswire.com/news/home/20150528006509/en/
Senior Financial Analyst
[email protected]
or
Assistant Vice President
[email protected]
or
Manager, Public Relations
[email protected]
or
Assistant Vice President, Public Relations
[email protected]
Source:
Advisor News
Annuity News
Health/Employee Benefits News
Life Insurance News