S&P’s affirmed its “A” counterparty credit and financial strength ratings on Electric Insurance Co. (EIC) based on EIC’s strategic alliance with General Electric Co. (GE), extremely strong capital position, solid operating performance, and strong management team. The outlook is stable.
“The outlook reflects EIC’s strategic relationship to GE and its ability to offer retrospectively rated commercial lines protection to the company and to continue personal lines coverage to GE employees,” said S&P’s credit analyst Grace Osborne.
Net premium growth in personal lines is expected to be 5-7 percent. The ROR for the entire book is expected to improve to 6-10 percent in the next three years. The combined ratio should stay at about 105 percent in the next 12-18 months. Capital adequacy is expected to remain extremely strong because of EIC’s relatively low potential catastrophe exposure and the absence of any long-tailed latent exposures. In addition, no significant change in capital management is expected.
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