Ratings Roundup: Prism, Slavonic Mutual, AvMed

November 3, 2011

A.M. Best Co. has affirmed the financial strength rating of ‘A-‘ (Excellent) and issuer credit rating of “a-” of Vermont-based captive Prism Assurance, Ltd., both with stable outlooks. The ratings reflect Prism’s “strong capitalization and solid operating performance,” said Best. “Also inuring to the ratings is Prism’s strategic role as the captive insurance company of Apogee Enterprises, Inc., and the substantial financial flexibility available to Prism as part of Apogee.” As partial offsetting factors, Best noted “Prism’s relatively large retained insurance limits and its limited market profile as a single parent captive. Nonetheless, the ratings recognize the company’s balance sheet strength and conservative underwriting leverage measures.”

A.M. Best Co. has revised the outlook to negative from stable, and affirmed the financial strength rating of ‘A’ (Excellent) and issuer credit rating of “a” of Slavonic Mutual Group and its members, Slavonic Mutual Fire Insurance Association and Slavonic Insurance Company of Texas. All companies are domiciled in Rosenberg, Texas. Best explained that the revised outlook “reflects Slavonic’s variable underwriting performance in recent years, elevated expense ratios due to scale, as well as the group’s narrow business profile. Slavonic writes a limited product base within a tight geographic spread in Texas, which exposes the group to frequent and severe localized weather events. This was particularly evident in recent years, as severe storms generated significant claims and gross losses. Nevertheless, solid investment income has led to operating profit and surplus growth in most recent years, helping to solidify the group’s extremely strong risk-adjusted capitalization.”

A.M. Best Co. has revised the outlook to negative from stable and affirmed the financial strength rating of ‘B++’ (Good) and issuer credit rating of “bbb” of Florida-based AvMed Inc. Best said the revised outlook recognizes the negative impact several one-time non-recurring events had on AvMed’s operating results and net underwriting margin during the first six months of 2011 and the resulting negative impact on AvMed’s risk-adjusted capitalization.” Best will continue to monitor the company’s operating performance and capital adequacy going forward.

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