A.M. Best Co. has revised the outlook to positive from stable and affirmed the financial strength rating of B+ (Good) and issuer credit rating of “bbb-” of MGA Insurance Co. Inc. (MGA) in Dallas.
The ratings agency noted that the rating actions recognize MGA’s favorable risk-adjusted capitalization and profitable operating results during a period of challenging economic conditions, particularly within its niche of personal non-standard automobile.
The company has adjusted rates and advanced its pricing sophistication, which has combined with recent favorable loss trends to lead to continuing improvement in underwriting performance, according to A.M. Best. In addition, MGA has achieved organic surplus growth in each of the past three years, inclusive of dividend payments to its parent company, Gainsco Inc.
These positive rating factors are somewhat offset by MGA’s historically variable underwriting performance. While more aggressive premium growth in past years has been tempered, some recent volatility in premium production has resulted in slightly elevated underwriting leverage measures. Moreover, the company maintains a somewhat modest business profile with concentration in states with generally difficult operating environments for the non-standard automobile segment.
Source: A.M. Best
Topics Trends Texas Insurance Wholesale
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