AM Best Affirms Credit Ratings of First Colonial Insurance Company

OLDWICK, N.J.--(BUSINESS WIRE)--
AM Best has affirmed the Financial Strength Rating of A (Excellent) and the Long-Term Issuer Credit Rating of “a” (Excellent) of First Colonial Insurance Company (First Colonial) (Jacksonville, FL). The outlook of these Credit Ratings (ratings) is stable.

The ratings reflect First Colonial’s balance sheet strength, which AM Best assesses as very strong, as well as its weak operating performance, neutral business profile and appropriate enterprise risk management.

First Colonial’s very strong balance sheet is anchored by its strongest risk-adjusted capitalization, as measured by Best’ Capital Adequacy Ratio (BCAR), and its effectively managed investment portfolio. Partially offsetting these factors is First Colonial’s substantial dependence on reinsurance, which is inherent of its business strategy as a distributor of automobile warranty and protection products. The company’s weak operating performance reflects historical volatility and negative trends in underwriting results tied to certain lines of business. First Colonial has taken numerous actions to regain profitability, this coupled with a trend of higher vehicle residual values, has resulted in improved operating results in the past few years. AM Best notes that the company continues to supplement its core product income with a suite of ancillary product offerings, and from fee income from affiliate companies within the Allstate Dealer Services Group. First Colonial’s ratings also benefit from the explicit and implicit support provided by The Allstate Corporation (AllCorp), its ultimate parent. As a subsidiary of AllCorp, First Colonial benefits from its expansive market presence and brand-name recognition.

This press release relates to Credit Ratings that have been published on AM 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 AM Best’s Recent Rating Activity web page. For additional information regarding the use and limitations of Credit Rating opinions, please view Guide to Best's Credit Ratings. For information on the proper use of Best’s Credit Ratings, Best’s Preliminary Credit Assessments and AM Best press releases, please view Guide to Proper Use of Best’s Ratings & Assessments.

AM Best is a global credit rating agency, news publisher and data analytics provider specializing in the insurance industry. Headquartered in the United States, the company does business in over 100 countries with regional offices in London, Amsterdam, Dubai, Hong Kong, Singapore and Mexico City. For more information, visit www.ambest.com.

Copyright © 2021 by A.M. Best Rating Services, Inc. and/or its affiliates. ALL RIGHTS RESERVED.

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Kate Steffanelli
Senior Financial Analyst

+1 908 439 2200, ext. 5063

[email protected]

Edin Imsirovic
Associate Director

+1 908 439 2200, ext. 5740

[email protected]

Christopher Sharkey
Manager, Public Relations

+1 908 439 2200, ext. 5159

[email protected]

Jim Peavy
Director, Communications

+1 908 439 2200, ext. 5644

[email protected]

Source: AM Best