A.M. Best Assigns Issuer Credit Rating to Conifer Holdings, Inc. and Affirms Ratings of Its Subsidiaries

OLDWICK, N.J.--(BUSINESS WIRE)-- A.M. Best has assigned an issuer credit rating (ICR) of “bb” to Conifer Holdings, Inc. (CHI) [NASDAQ: CNFR]. The outlook assigned to the rating is negative. Concurrently, A.M. Best has affirmed the financial strength rating (FSR) of B++ (Good) and the ICR of “bbb” of Conifer Insurance Company (Conifer). The outlook for each of these ratings is negative. A.M. Best also has affirmed the FSR of B+ (Good) and the ICR of “bbb-” of Conifer’s affiliate, White Pine Insurance Company (White Pine). The outlook for each of these ratings is stable. These two companies are subsidiaries of CHI, a publicly traded property/casualty insurance holding company. All companies are domiciled in Birmingham, MI.

Conifer’s and White Pine’s ratings reflect supportive risk-adjusted capitalization, satisfactory liquidity, manageable underwriting leverage and a business profile that is beginning to take greater shape as the focus of the company shifts to specific classes of business and lines of coverage with which the company is very familiar. The companies’ staffs and executives previously wrote the same classes and lines when they were formerly with Michigan-based North Pointe Insurance Company. Conifer writes specialty commercial lines and specialty personal lines primarily on an excess and surplus lines basis. White Pine is being re-mixed to mirror Conifer’s writings on an admitted basis, except that it does not write any workers’ compensation business. Both companies have begun ceding their specialty homeowner lines to an unrated affiliate in order to reduce their exposures to natural catastrophe losses.

Partially offsetting these positive factors is the execution risk involved in building a profitable book of specialty niche property/casualty business out of the growth currently being experienced. Conifer has essentially been operating as a quasi-startup company the past several years since its acquisition by current management with a relatively limited amount of premium being written until recently. Conifer’s negative outlooks reflect the recent history of unfavorable operating results generated prior to 2015 and the execution risk in turning these around as the company grows. White Pine’s stable outlooks reflect its recent and short history of favorable operating results under current CHI management (since late-2010), offset by the execution risk of rapid growth and the re-mixing of its book of business. Each company’s ability to generate profits to help support organic capital growth is a very important issue that A.M. Best will monitor over the near term.

Positive rating movement could occur if operating results demonstrate profitability that is sustainable with supportive capitalization through the group’s growth phase. Negative rating actions could occur if the group's operating performance reflects weak underwriting fundamentals that fail to meet projections, or appear to have a prospective negative impact on capitalization in the face of increasing underwriting leverage.

The ratings of CHI reflect standard notching from its lead insurance subsidiary, Conifer, and the outlook reflects the linkage of CHI’s rating to that of Conifer. CHI completed its initial public offering in August 2015 and is traded on the NASDAQ Global Market. CHI’s leverage and coverage ratios are supportive of the ratings. Its status as a publicly traded company offers potential financial flexibility for the enterprise with access to public debt and equity markets.

This press release relates to rating(s) 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.

A.M. Best is the world’s oldest and most authoritative insurance rating and information source. For more information, visit www.ambest.com.

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A.M. Best

Dan Teclaw, +1 908-439-2200, ext. 5394

Senior Financial Analyst

dan.teclaw@ambest.com

or

Gerard Altonji, +1 908-439-2200, ext. 5626

Assistant Vice President

gerard.altonji@ambest.com

or

Christopher Sharkey, +1 908-439-2200, ext. 5159

Manager, Public Relations

christopher.sharkey@ambest.com

or

Jim Peavy, +1 908-439-2200, ext. 5644

Assistant Vice President, Public Relations

james.peavy@ambest.com

Source: A.M. Best