A.M. Best Affirms Ratings of Central States Indemnity Co. of Omaha

A.M. Best Co. has affirmed the financial strength rating of A+ (Superior) and issuer credit rating of “aa-” of Central States Indemnity Co. of Omaha (CSI) in Omaha, Neb. The outlook for both ratings is stable.

The ratings reflect CSI’s excellent risk-adjusted capitalization, favorable balance sheet liquidity and low underwriting leverage, as well as the benefits made available though its ultimate parent, Berkshire Hathaway Inc.

CSI is a specialty insurance company that provides payment protection programs to some of the largest financial institutions in the United States.

These positive rating factors are somewhat offset by the residual effects from a continued decline in CSI’s core credit insurance book of business, as a number of bank clients move in tandem with the credit insurance industry and continue to offer non-insurance debt protection products in lieu of traditional credit insurance.

Additional offsetting factors include CSI’s weakened underwriting performance, elevated investment leverage, as well as the near-term execution risk and strain to earnings brought on by upfront costs and investments associated with new lines of business.

Source: A.M. Best

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