AM Best Upgrades Credit Ratings for Members of Arbella Insurance Group

October 15, 2020

AM Best has upgraded the Financial Strength Rating to A (Excellent) from A- (Excellent) and the Long-Term Issuer Credit Ratings to “a” from “a-” of Arbella Mutual Insurance Company and its three pooled insurance entities, Covenant Insurance Company in Farmington, Conn., Arbella Indemnity Insurance Company and Arbella Protection Insurance Company in Quincy, Mass. These companies are collectively known as Arbella Insurance Group. The outlook of these Credit Ratings has been revised to stable from positive.

The ratings of Arbella reflect the group’s balance sheet strength, which AM Best categorizes as very strong, as well as its adequate operating performance, neutral business profile and appropriate enterprise risk management (ERM).

The ratings upgrades reflect Arbella’s strengthened risk-adjusted capitalization, supported by favorable trends in surplus growth and loss reserve development, as well as an enhanced reinsurance program.

AM Best expects further improvement in risk-adjusted capitalization as the group continues to grow surplus through profitable operations and maintains its more robust reinsurance structure, according to an AM Best press release.

Additionally, the ratings reflect adequate operating performance, driven by key metrics that are in line with the private passenger standard auto and homeowners composite five-year averages, inclusive of pre-tax return on revenue, combined ratio and operating ratio.

The ratings also reflect Arbella’s business profile, which is considered neutral, as the group’s focused geographic concentration is partially mitigated by the proven ability to effectively operate within its territories by capitalizing on enhanced data analytics and pricing programs. Furthermore, the ERM program is appropriate for the risk profile of the organization, the press release said.

Source: AM Best

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