AM Best Revises Outlooks to Stable for Specialty Risk of America

OLDWICK, N.J.–(BUSINESS WIRE)–AM 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 Specialty Risk of America
(SPRISKA) (Springfield, IL).

The Credit Ratings (ratings) reflect SPRISKA’s balance sheet strength,
which AM Best categorizes as very strong, as well as its marginal
operating performance, limited business profile and marginal enterprise
risk management (ERM).

The revised outlooks to stable reflect the improvement in SPRISKA’s
operating performance in 2018 and developing ERM capabilities. SPRISKA’s
balance sheet strength is supported by the very strong level of
risk-adjusted capitalization, as measured by Best’s Capital Adequacy
Ratio (BCAR). SPRISKA’s operating performance on a five-year average
basis is marginal, with key operating metrics that lag its peer averages
along with the company’s combined ratio. However, net income has been
positive over the past few years, and the company achieved underwriting
profitability in 2018 largely driven by improvement in the expense ratio.

SPRISKA’s business profile is limited due to the company’s geographical
concentration and limited data analytics capability. In addition, the
marginal ERM assessment reflects the emerging nature of the ERM program,
which the company formalized in 2018. Negative rating action is possible
if there is deterioration in the operating results or capitalization
levels fall below AM Best’s expectation for the current rating level.

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

Edin Imsirovic
Senior Financial Analyst
+1
908 439 2200, ext. 5740
edin.imsirovic@ambest.com

Robert Raber
Associate Director
+1 908 439
2200, ext. 5696
robert.raber@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