AM Best: Outlooks Revised to Positive for Texas’ Columbia Lloyds Companies

October 8, 2019

AM Best has revised the outlooks to positive from stable, and affirmed the Financial Strength Rating of B++ (Good) and the Long-Term Issuer Credit Rating of “bbb+” of Columbia Lloyds Insurance Co. and MDOW Insurance Co. The Houston-based personal property insurers are collectively referred to as Columbia Lloyds Companies (Columbia Lloyds).

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

The revised outlooks to positive reflect underwriting and operating performance metrics that outperform the composite driven by management’s corrective actions, inclusive of decreasing exposures and enforcing strict underwriting guidelines.

These actions combined with a prudent reinsurance program, have led to improved profitability from earlier years. AM Best’s expectation is for the company’s above average operating performance to continue while it maintains very strong balance sheet strength.

Columbia Lloyds’ balance sheet strength reflects the strongest level of risk-adjusted capitalization and historically favorable reserve development, partially offset by above average dependence on reinsurance as measured by ceded leverage.

The limited business profile reflects its geographically concentrated position in the Texas personal property market. Columbia Lloyds also benefits from an appropriate ERM program that supports the risk profile of the organization.

Source: AM Best

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