A.M. Best Co. has affirmed the financial strength rating (FSR) of ‘A’ (Excellent) and issuer credit ratings (ICR) of “a” of Infinity Property & Casualty Group and its operating members. Best also affirmed the ICR of “bbb” and debt rating of “bbb” on $200 million 5.50 percent senior unsecured notes, due 2014 issued by Infinity Property & Casualty Corporation (IPCC). The outlook for all ratings is stable. All of the above named companies are headquartered in Birmingham, Alabama. The rating affirmations of Infinity P/C reflect its “strong risk-adjusted capitalization, consistent operating profitability and strong non-standard automobile market presence,” said Best. “Infinity P/C ranks among the leading non-standard automobile writers in the United States. In addition, the group’s ratings recognize the financial flexibility provided by IPCC, which has modest financial leverage measures and favorable fixed interest coverage ratios. Infinity P/C’s business is heavily focused in California and Florida, which generates slightly more than two-thirds of the group’s direct business written.” Best said the FSR of ‘A’ (Excellent) and ICRs of “a” have been affirmed for Infinity Property & Casualty Group and its following operating members: Infinity Assurance Insurance Company; Infinity Auto Insurance Company; Infinity Casualty Insurance Company; Infinity General Insurance Company; Infinity Indemnity Insurance Company; Infinity Insurance Company; Hillstar Insurance Company; Infinity Preferred Insurance Company; Infinity Premier Insurance Company; Infinity Reserve Insurance Company; Infinity Safeguard Insurance Company; Infinity Security Insurance Company; Infinity Select Insurance Company; Infinity Specialty Insurance Company; Infinity Standard Insurance Company; Infinity County Mutual Insurance Company.
A.M. Best Co. has downgraded the financial strength rating (FSR) to ‘A’ (Excellent ) from ‘A+’ (Superior) and issuer credit rating (ICR) to “a+” from “aa-” of Wisconsin-based West Bend Mutual Insurance Company, and has revised, its outlook on the ratings from negative to stable. Best has also affirmed the FSR of ‘A’ (Excellent) and ICR of “a” of West Bend’s majority owned subsidiary, Michigan Insurance Company (MIC), also with a stable outlook. The rating actions reflect West Bend’s “subpar, albeit generally positive, operating performance in recent years that continues to trail its commercial casualty peer composite,” Best explained. “While West Bend’s results significantly improved in 2009, overall profitability still trails the norm generally seen by companies in the Superior rating categories. Furthermore, West Bend’s business profile as a Midwest writer subjects the company to regional storm losses. While earnings have principally remained profitable, they have been significantly and negatively impacted by soft market conditions in recent years.” On the more positive side Best cited West Bend’s “strong level of capitalization, its stable regional market presence and the company’s plans to achieve a consistent level of operating earnings. The outlook considers the group’s strong capitalization and expectation for improved earnings in the medium term.” The affirmation of MIC’s ratings recognizes its “solid capitalization, historically favorable operating results and the operational and financial support the company receives from West Bend,” Best continued. “More explicitly, West Bend’s support is particularly evident by its assumption of 75 percent of MIC’s business through a quota share reinsurance treaty.”
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