A.M. Best Revises Outlooks to Stable for CEM Insurance Company
The stable outlooks are based on CEM’s improved operating and underwriting results over the past several years, driven primarily by the company’s focus on its
The Credit Rating (rating) affirmations reflect the group’s supportive level of risk-adjusted capitalization, improved operating performance, better-than-average loss ratios and the history of financial support provided by its shareholders.
The positive rating factors are offset somewhat by the company’s business and geographic concentration risk; operating predominantly as a non-standard private passenger auto writer in one state (
Additional offsetting rating factors include CEM’s high gross and ceded leverage measures and associated heightened level of credit risk and the company’s history of adverse prior year loss reserve development. To address the high leverage concerns, the company has increased its retention under its quota share reinsurance program over time, and maintains a panel of authorized reinsurers of high credit quality and holds collateral for all unauthorized reinsurers’ aggregate liabilities.
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. For information on the proper media use of Best’s Credit Ratings and
Copyright © 2017 by A.M. Best Rating Services, Inc. and/or its subsidiaries. ALL RIGHTS RESERVED.
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