OLDWICK, N.J.--(BUSINESS WIRE)--A.M. Best Co. has affirmed the financial strength rating (FSR) of A (Excellent) and the issuer credit rating (ICR) of “a” of Attorneys’ Liability Assurance Society, Inc., A Risk Retention Group (ALAS, Inc.) (Burlington, VT). The outlook for both ratings is stable. Concurrently, A.M. Best has withdrawn the FSR of A (Excellent) and the ICR of “a” of Attorneys’ Liability Assurance Society (Bermuda) Ltd. (ALAS, Ltd.) (Bermuda) as it no longer serves as a risk-bearing entity.
Effective January 1, 2014, ALAS, Inc. and ALAS, Ltd. completed a restructuring of their insurance operations. As of that date, ALAS, Ltd. transferred all of its insurance risks to ALAS, Inc., thereby completing its function as a reinsurer of lawyer professional liability risks. With this restructuring, ALAS, Ltd. carries no insurance-related liabilities on its books. Additionally, ALAS, Ltd. has re-domiciled to Vermont; and subsequently, eliminated Bermuda from its name.
The affirmation of ALAS, Inc.’s ratings reflects its supportive risk-adjusted capital, favorable operating performance and long-term dedication to the lawyer professional liability market. In addition, A.M. Best recognizes the extensive loss prevention resources provided to member insureds and the ALAS organization’s strong enterprise risk management program.
Partially offsetting these positive rating factors are the risks inherent within the lawyer professional liability sector including price competition, limited product line diversification and exposure to low frequency/high severity claims. The outlook for ALAS, Inc.’s ratings is based on its ability to maintain underwriting discipline and proactive management of its capital position, along with a smooth and successful transition of assets and liabilities formerly held at ALAS, Ltd.
While A.M. Best believes the ratings and outlook of ALAS, Inc. are well positioned at the current level, factors that may lead to positive rating actions include extended favorable operating results with supportive growth in policyholders’ surplus. Factors that may lead to negative rating actions include, but are not limited to, adverse changes in the lawyer professional liability market dynamics, protracted periods of unfavorable underwriting experience or shifting policyholders’ surplus position.
The methodology used in determining these ratings is Best’s Credit Rating Methodology, which provides a comprehensive explanation of A.M. Best’s rating process and contains the different rating criteria employed in the rating process. Best’s Credit Rating Methodology can be found at www.ambest.com/ratings/methodology.
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