AM Best Revises Issuer Credit Rating Outlook to Positive for Members of Arbella Insurance Group

Business Wire

OLDWICK, N.J.--(BUSINESS WIRE)--
AM Best has revised the outlook to positive from stable for the Long-Term Issuer Credit Ratings (Long-Term ICRs) and affirmed the Financial Strength Rating (FSR) of A (Excellent) and the Long-Term ICRs of “a” (Excellent) of Arbella Mutual Insurance Company and its three pooled insurance entities: Arbella Protection Insurance Company, Arbella Indemnity Insurance Company and Covenant Insurance Company (Farmington, CT). These companies are collectively known as Arbella Insurance Group (Arbella). The outlook of the FSR is stable. All companies are domiciled in Quincy, MA, unless otherwise specified.

The Credit Ratings (ratings) reflect Arbella’s balance sheet strength, which AM Best assesses as very strong, as well as its adequate operating performance, neutral business profile and appropriate enterprise risk management (ERM).

The revised Long-Term ICR outlook to positive from stable is based on Arbella’s key operating performance metrics coming into line with strong assessed rating units within its private passenger standard auto and homeowners composite on both a five-year and 10-year average basis. Additionally, Arbella has reported significantly improved underwriting results and operating performance in 2024, which were driven by management’s numerous pricing, underwriting and claims initiatives.

Arbella maintains very strong balance sheet strength, reflective of its strongest level of risk-adjusted capitalization, as measured by Best’s Capital Adequacy Ratio (BCAR), modest underwriting leverage measures relative to its composite, strong liquidity measures, consistently favorable loss reserve development and a conservative investment risk profile. The balance sheet is protected from significant weather-related events through a comprehensive catastrophe reinsurance program. The group’s risk-adjusted capitalization has trended upward recently from exposure reduction initiatives and increased catastrophe reinsurance coverage purchases.

AM Best assesses Arbella’s business profile as neutral, reflective of its long-standing market presence and market expertise in Massachusetts, strong distribution network and experienced management team. Arbella’s ERM is assessed as appropriate for its risk profile, which is driven by its established ERM structure, refined risk management processes and comprehensive reinsurance program, which mitigates tail risk.

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 Performance Assessments, 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.