A.M. Best Co. has revised the outlook to stable from negative and affirmed the financial strength rating of C+ (Marginal) and issuer credit rating of “b-” of First Chicago Insurance Co. (First Chicago) in Bedford Park, Ill.
The stable outlook is based on First Chicago’s recently improved operating performance and leverage measures. In recent years, pre-tax operating results were favorable as a result of increased fee income, improved pricing segmentation and underwriting initiatives.
The ratings reflect First Chicago’s historically weak underwriting results and elevated underwriting leverage. Somewhat offsetting these negative rating factors is the financial support historically afforded First Chicago by its parent, J and P Holdings Inc., its favorable policy fee income and long-standing local market presence.
Negative rating actions could occur if First Chicago’s net premium growth, underwriting losses or surplus declines result in lower risk-adjusted capitalization. Positive rating actions could occur through sustained improvement in the company’s underwriting performance and risk-adjusted capitalization.
Source: A.M. Best
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