A.M. Best Revises Outlooks to Positive for Members of Permanent General Insurance Group
Concurrently,
The ratings for PGIG are based on the group’s adequate risk-adjusted capitalization, implicit and explicit support from its parent AFMIC, good balance sheet liquidity, historically positive earnings, geographic diversification and use of multiple distribution channels. These positive rating factors are partially offset by a concentration in private passenger non-standard auto lines of business, increased claims frequency and severity, a recent increase in losses driven by a geographically expanded book of business and a low interest rate environment.
The ratings are based on AFIG’s strong risk-adjusted capitalization and its significant market presence in the Midwest as a leading personal lines group that is supported by its exclusive agency distribution system, all of which is founded upon management's prudent operating philosophy, as evidenced by the group's moderate underwriting leverage, conservative reserving practices and high-quality investment portfolio. Somewhat offsetting these positive rating attributes are the group’s above break-even underwriting results, caused partially by weather-related losses that the group is highly susceptible to throughout its geographic footprint, as well as elevated common stock leverage that exposes the group's investment portfolio to earnings volatility.
While
The ratings of AFLIC reflect its position in AFIG. The ratings also reflect AFLIC’s well-established marketing and distribution operations in the Midwest, solid operating performance, strong stand-alone risk-adjusted capitalization and sound liquidity. Partially offsetting these strengths are the company's limited product portfolio and continued challenge to improve ordinary life insurance sales growth through its multiline agent channel, which relies heavily on its property/casualty-oriented sales force.
Positive rating actions could occur if the life company is able to demonstrate a growth trend on a stand-alone basis without reliance on the property/casualty operations. Downward pressure on the ratings could occur if there is a negative rating action on the property/casualty parent company's operations that puts into question the strength and viability of AFLIC's stand-alone rating profile, AFLIC's capitalization, operating performance or changes in business model.
The FSR of A- (Excellent) and the Long-Term ICRs of “a-” have been affirmed for the following members of
-
Permanent General Assurance Corporation of Ohio -
The General Automobile Insurance Company, Inc. -
Permanent General Assurance Corporation
The FSR of A (Excellent) and the Long-Term ICRs of “a” have been affirmed for the following members of
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American Family Mutual Insurance Company -
American Family Insurance Company -
American Standard Insurance Company of Ohio -
Midvale Indemnity Company -
American Standard Insurance Company of Wisconsin -
Homesite Indemnity Company -
Homesite Insurance Company of California -
Homesite Insurance Company of Florida -
Homesite Insurance Company of Georgia -
Homesite Insurance Company of Illinois -
Homesite Insurance Company of New York -
Homesite Insurance Company of the Midwest -
Homesite Insurance Company - Homesite Lloyd's of
Texas
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.
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