A.M. Best Co. affirmed the “A+” financial strength rating (FSR) for Capitol Transamerica Group, Madison, Wis., following Alleghany Corp.’s acquisition of the company.
The rating reflects Capitol Transamerica’s superior level of capitalization, solid liquidity and outstanding operating leverage. In addition, Capitol Transamerica’s long-standing agency relationships have enhanced its market presence and assisted in the historical profitability of the group. Active monitoring of its expansion efforts and prudent underwriting standards have also enabled Capitol Transamerica to operate successfully in niche specialty markets. The rating recognizes the vital role Alleghany Corp. will play in enhancing Capitol Transamerica’s business plan, including increasing the efficiency of operations, improving its distribution network, reducing the risk within the investment portfolio and strengthening management of the organization.
Partially offsetting these positive factors are the fluctuation in operating performance from weakened underwriting results; variation in the unrealized earnings from a portion of equity investments, and competitive market pressures, which have had an impact on the stability of surplus over the past five years.
The rating for Capitol Transamerica Group applies to Capitol Indemnity Corp. and its reinsured affiliate, Capitol Specialty Insurance Corp. Capitol Transamerica Group provides commercial multi-peril, surety, general liability and workers’ compensation coverage in 37 states.
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