OLDWICK, N.J.--(BUSINESS WIRE)--A.M. Best has revised the outlooks to positive from stable and affirmed the Financial Strength Rating of B+ (Good) and Long-Term Issuer Credit Rating of “bbb-” of Bankers Insurance Company (Bankers) (St. Petersburg, FL) and its property/casualty subsidiaries, Bankers Specialty Insurance Company (Metairie, LA) and First Community Insurance Company (St. Petersburg, FL).
The revised outlooks reflect Bankers’ numerous underwriting actions and an effective refinement of operations resulting in improved risk-adjusted capitalization and process efficiencies. Though results over the most recent five-year period remain volatile, the operating strategies implemented over several years have begun to be evident. The actions include sophisticated pricing models, expense management initiatives as well as various risk management strategies that address both geographic risk selection and policy terms and conditions. Additionally, surplus has increased at a greater rate than net written premiums, driven more recently by underwriting income, which has supported the company’s capitalization position as measured by Best’s Capital Adequacy Ratio (BCAR).
Partially offsetting these positive factors is a heavy concentration in southeastern coastal states, particularly Florida. This is mitigated through a comprehensive reinsurance program which substantially reduces the potential impact from a large catastrophic event. Furthermore, Bankers continues to maintain an above average expense position as illustrated by its expense ratio. Management has made recent strides in reducing expenses in both functional and administrative areas.
Positive rating action may result from sustained improvement in operating performance while continuing to improve the current level of risk-adjusted capitalization.
Downward rating pressure, while unlikely, could occur if operating results deteriorate beyond expectations, causing a decline in capitalization.
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