AM Best Upgrades Credit Ratings of Benchmark Insurance Company; Assigns Credit Ratings to American Liberty Insurance Company
OLDWICK, N.J.–(BUSINESS WIRE)–AM Best has upgraded the Financial Strength Rating (FSR) to A
(Excellent) from A- (Excellent) and the Long-Term Issuer Credit Rating
(Long-Term ICR) to “a” from “a-” of Benchmark Insurance Company (BIC)
(headquartered in Wayzata, MN). The outlook of these Credit Ratings
(ratings) has been revised to stable from positive. AM Best also has
assigned an FSR of A (Excellent) and the Long-Term ICR of “a” to
American Liberty Insurance Company (ALIC) (Provo, UT). The outlook
assigned to these ratings is stable. Additionally, BIC and its
affiliate, ALIC, are collectively referred to as the group.
The rating assignment for ALIC reflects its affiliation with BIC under a
100% quota share agreement that was approved by state insurance
regulators in Kansas and Utah. The group was formed as a result of
ALIC’s acquisition by Benchmark Holding Company, which is owned by BIC’s
ultimate parent, BIC Holdings LLC. ALIC was purchased to expand the
group’s licensing authority in the Southwest, principally in Arizona,
Nevada and Utah, and for ALIC to become a second issuing carrier for
BIC’s program business.
The ratings reflect the group’s balance sheet strength, which AM Best
categorizes as very strong, as well as its strong operating performance,
limited business profile and appropriate enterprise risk management
(ERM).
AM Best assesses the group’s balance sheet strength as very strong,
underpinned by risk-adjusted capitalization, as calculated by Best’s
Capital Adequacy Ratio, at the strongest level. Additional positive
factors include favorable liquidity, underwriting and operating cash
flows, a conservative investment portfolio that has generated steady net
investment income, and favorable loss and LAE reserve development over
the past five years. Partially offsetting these positive factors is the
group’s historical adverse reserve development related to its grocers’
program within its workers’ compensation book of business. However, this
program has been cancelled and is no longer impacting the group’s
results materially.
The group has generated a strong operating performance, bolstered by
five consecutive years of increases in underwriting and investment
income. Underwriting results have benefited from a disciplined selection
of seasoned program partners and recent favorable loss reserve
development trends on prior accident years. The group operates as a
program writer and diversified insurance services provider of workers’
compensation business through managing general agents in 49 states. As
an insurer focused on workers’ compensation, its limited business
profile leaves it susceptible to adverse regulatory or judicial
decisions in certain jurisdictions.
ERM capabilities are considered appropriate as the group maintains a
formalized ERM process through its affiliate TREAN Corporation, which
addresses the group’s overall risk profile with corresponding mitigation
strategies.
This press release relates to Credit Ratings that have been published
on AM Best’s website. For all rating information relating to the release
and pertinent disclosures, including details of the office responsible
for issuing each of the individual ratings referenced in this release,
please see AM Best’s Recent
Rating Activity web page. For additional information
regarding the use and limitations of Credit Rating opinions, please view Understanding
Best’s Credit Ratings. For information on the proper media
use of Best’s Credit Ratings and AM Best press releases, please view Guide
for Media – Proper Use of Best’s Credit Ratings and AM Best Rating
Action Press Releases.
AM Best is a global rating agency and information provider with a
unique focus on the insurance industry. Visit www.ambest.com
for more information.
Copyright © 2019 by A.M. Best Rating Services, Inc. and/or its
affiliates. ALL RIGHTS RESERVED.
Contacts
Kevin Dorsey
Senior Financial Analyst
+1 908
439 2200, ext. 5401
kevin.dorsey@ambest.com
Joseph Burtone
Director
+1 908 439 2200, ext.
5125
joseph.burtone@ambest.com
Christopher Sharkey
Manager, Public Relations
+1
908 439 2200, ext. 5159
christopher.sharkey@ambest.com
Jim Peavy
Director, Public Relations
+1 908
439 2200, ext. 5644
james.peavy@ambest.com