AM Best Upgrades Credit Ratings from Auto Club Insurance Co. from Florida

AM Best has upgraded the Financial Strength Rating to A- (Excellent) from B ++ (Good) and the Long-Term Issuer Credit Rating to "a-" from "bbb +" from Auto Club Insurance Company of Florida (ACICF), with headquarters in Tampa, Fla. And AAA & # 39; s Florida-based insurer. The outlook for these ratings is stable.

According to a statement by Best, the ratings reflect the ACicF balance sheet strength, which AM Best categorizes as strong, as well as the strong business performance, the limited company profile and appropriate enterprise risk management (ERM).

The rating upgrades reflect the improving balance sheet strength of the company based on a catastrophic stress tested basis, as demonstrated by a solid surplus growth in the largest part of the last five years, according to Best. After a modest loss of surplus in 2017, mainly supported by Irma losses caused by the hurricane, the surplus of ACICF recovered in 2018. The company's balance sheet remains strong with healthy liquidity measures, favorable underwriting leverage ratios and historically superfluous reserve development. The assessments also recognize the implicit commitment of the final parent, Auto Club Insurance Association (Dearborn, Mich.), For which ACICF receives rating improvement.

The best note is that the operational performance of ACICF is strong, as shown by the five-year average before tax and the total return on sales and capital that compare favorably with the composition. In addition, the five-year average combined and operational ratios of the company perform better than the composite. As a single-state writer in Florida, the company is exposed to hurricane events, as well as legal, economic and regulatory problems. As a result, the company profile is considered limited.

However, the company adheres to a formalized, comprehensive ERM program that identifies important risks for the organization and at the same time mitigates mitigation strategies to compensate for these risks, says Best. In addition, the company maintains sufficient reinsurance coverage to insulate the policyholder part from significant weather conditions.

ACICF provides protection to more than 64,000 families in Florida by combining home, car & # 39; s and umbrellas in a single policy. AAA members can also receive additional savings on selected auto maturities based on the duration of their membership.

In a statement about the announcement, Thomas J. White, Executive Vice President of Florida, AAA – The Auto Club Group, said the upgrading of the creditworthiness reassures the Florida's after three major hurricanes hit the state in the last three years. . It noted that more than 8,000 households have submitted orca-related claims to ACICF because of the three storms.

"Floridians can find comfort in knowing that we are a financially strong and viable organization that has the ability to pay claims, despite the risks that the Florida market brings," said White. "This updated credit rating should reassure Floridians that we will be there, through the good and bad times."

The Auto Club Group (ACG) is the second largest AAA club in North America. ACG and its subsidiaries offer members, insurance, financial services and travel options to more than 9.8 million members in eleven states and two US territories, including Florida, Georgia, Iowa, Michigan, Nebraska, North Dakota, Tennessee, Wisconsin, Puerto Rico and the American Virgin. Islands; most of Illinois and Minnesota; and a part of Indiana.

Source: AM Best, The Auto Club Group


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