AM Best has upgraded the financial strength rating (FSR) to A+ (superior) from A (excellent) and the long-term issuer credit ratings (long-term ICR) to “aa-” from “a+” for the members of Concord Group Insurance Companies, which is led by Concord General Mutual Insurance Company in Concord, N.H. The outlook of these credit ratings has been revised to stable from positive. Concord Group is a provider of home, auto, business and life insurance through the independent agency system.
Concurrently, AM Best has upgraded the FSR to A (excellent) from A- (excellent) and the long-term ICR to “a” from “a-” of California Capital Insurance Company in Monterey, Calif., and its subsidiaries, which operate under an intercompany pooling arrangement, collectively referred to as Capital Insurance Group. The outlook of these ratings is stable.
In addition, AM Best has revised the outlooks to positive from stable and affirmed the FSR of A (excellent) and the long-term ICR of “a+” of Atlantic Casualty Insurance Company of Goldsboro, N.C.
Also, AM Best has affirmed the FSR of A++ (superior) and the long-term ICRs of “aa+” of Auto-Owners Insurance Company of Lansing, Mich., and its four wholly owned property/casualty companies that compose Auto-Owners Insurance Group (AOIG).
At the same time, AM Best has affirmed the FSR of A- (excellent) and the long-term ICR of “a-” of Auto-Owners Specialty Insurance Company (AOSIC) of Dover, Del. In addition, AM Best has affirmed the FSR of A+ (superior) and the long-term ICR of “aa-” of Auto-Owners Life Insurance Company (AOLIC) of Lansing, Mich., also a wholly owned subsidiary of Auto-Owners. The outlook of these ratings is stable.
The ratings of Concord Group reflect its balance sheet strength, which AM Best categorizes as strongest, as well as its adequate operating performance, neutral business profile and appropriate enterprise risk management (ERM).
The rating actions reflect Concord Group’s strategic position within the Auto-Owners organization, as well as the significant operating and financial benefits that Concord Group has realized as a result of its April 2017 affiliation with Auto-Owners, which is a highly rated, super-regional insurer with more than $13 billion in policyholders’ surplus.
The ratings reflect Capital’s balance sheet strength, which AM Best categorizes as very strong, as well as its marginal operating performance, neutral business profile and appropriate ERM.
The rating actions reflect the substantial explicit and implicit support Capital has received from Auto-Owners since December 2018, which followed severe net losses and surplus erosion due in part to the California wildfires in 2017 and 2018, as well as adverse reserve development on prior accident years in 2017.
The ratings of Atlantic Casualty reflect its balance sheet strength, which AM Best categorizes as strongest, as well as its adequate operating performance, neutral business profile and appropriate ERM.
Since its acquisition, Auto-Owners has increasingly supported Atlantic Casualty in various functions including, but not limited to actuarial services, product development, reinsurance, claims, marketing and information technology. The ratings also reflect Atlantic Casualty’s improved operating performance in recent years.
The ratings of AOIG reflect its balance sheet strength, which AM Best categorizes as strongest, as well as its very strong operating performance, favorable business profile and appropriate ERM.
AOIG has exhibited generally improved operating performance in recent years. AOIG also maintains a business profile that is well-balanced between personal and commercial lines and property/casualty business.
Through its acquisition of Atlantic Casualty and AOSIC in 2016, its affiliation with Concord General in 2017 and its acquisition of Capital in 2019, AOIG has further broadened its business profile from a product and geographic perspective. These positive rating factors are offset partially by its exposure to credit risk associated with the Michigan Catastrophic Claims Association.
The ratings of AOSIC reflect its balance sheet strength, which AM Best categorizes as very strong, as well as its adequate operating performance, very limited business profile and appropriate ERM.
AOSIC is a shell company that plans to provide excess and surplus lines coverage to small and medium-sized commercial businesses in North Carolina. Risk-adjusted capitalization is supportive of its business plan, which includes moderate premium growth projections.
In addition, the company is led by a management team with a track record of generating favorable operating results at its sister company, Atlantic Casualty, and possessing extensive knowledge of the surplus lines and commercial property/casualty business. These positive rating factors are offset partially by the expected concentration of non-admitted business in one state.
The ratings of AOLIC reflect its balance sheet strength, which AM Best categorizes as very strong, as well as its strong operating performance, neutral business profile and appropriate ERM.
The ratings consider AOLIC’s integral role and positive contribution to its property/casualty parent organization, diversified product portfolio, its favorable level of risk-adjusted capitalization and high quality investment portfolio.
The FSR has been upgraded to A+ (superior) from A (excellent) and the long-term ICRs to “aa-” from “a+” with the outlooks revised to stable from positive for the following members of Concord Group Insurance Companies:
- Concord General Mutual Insurance Company
- Green Mountain Insurance Company Inc.
- State Mutual Insurance Company
- Sunapee Mutual Fire Insurance Company
- Vermont Accident Insurance Company Inc.
The FSR has been upgraded to A (excellent) from A- (excellent) and the long-term ICRs to “a” from “a-“, each with a stable outlook, for the following members of Capital Insurance Group:
- California Capital Insurance Company
- Eagle West Insurance Company
- Monterey Insurance Company
- Nevada Capital Insurance Company
The FSR of A++ (superior) and the long-term ICRs of “aa+” have been affirmed, each with a stable outlook, for Auto-Owners Insurance Company and its wholly owned property/casualty subsidiaries:
- Home-Owners Insurance Company
- Owners Insurance Company
- Property-Owners Insurance Company
- Southern-Owners Insurance Company
Source: AM Best
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