A.M. Best has revised the outlooks to stable from negative and affirmed the Financial Strength Rating of B+ (Good) and the Long-Term Issuer Credit Rating of “bbb-” of Aspire General Insurance Co. in Rancho Cucamonga, Calif.
Aspire General is a private passenger auto liability and physical damage carrier. The company is currently only writing business in California.
The ratings reflect Aspire General’s balance sheet strength, which A.M. Best categorizes as adequate, as well as its marginal operating performance, limited business profile and appropriate enterprise risk management.
“The revised outlooks to stable from negative reflect Aspire General’s strong risk-adjusted capitalization, improved operating performance in recent years and senior management’s operating experience and in-depth knowledge of California’s private passenger non-standard automobile market,” A.M. Best stated.
The company is also technologically advanced for its size and utilizes predictive analytics in decision making with a heavy emphasis on managing loss frequency, according to A.M. Best.
A.M. Best also noted that partially offsetting these positive ratings factors are Aspire General’s above-average underwriting leverage, below-average liquidity measures and high reinsurance dependence.
“The company also has execution risk as a start-up, associated with growing its private passenger non-standard automobile book of business, a segment in which smaller insurance writers have experienced a material deterioration in operating results and policyholders’ surplus in recent years,” A.M. Best stated. “The general deterioration in the non-standard automobile line of business has been partially driven by economic conditions, significant price competition and adverse selection from large personal automobile writers with greater scale and pricing granularity.”
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