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 the Long-Term Issuer Credit Rating of “bbb+” of Great Plains Casualty, Inc. (Great Plains) (Cedar Rapids IA).
The outlook changes reflect Great Plains’ relatively strong risk-adjusted capitalization, favorable operating performance since its inception and in-depth knowledge of the commercial trucking industry. Offsetting these positive factors are the company’s narrow product focus and inherent risk as a relatively new company attempting to gain market share and expand its geographic presence.
Great Plains maintains favorable risk-adjusted capitalization due to its conservative underwriting and investment leverage measures. The Credit Ratings (ratings) also acknowledge the financial leverage and interest coverage of its parent holding company, Hillcrest Holdings, Inc., which had manageable debt outstanding as of Dec. 31, 2016. In addition, the company benefits from the expertise gained by having common management between Great Plains and its sister company, CRST International Inc., which provides transportation solutions and services to manufacturers and distributors in the United States and Canada. Great Plains also derives its customer base from the independent contractors affiliated with this sister company.
Great Plains’ ratings could be further affected positively by a continued trend of positive operating and underwriting profitability that outperforms the composite while maintaining strong risk-adjusted capitalization. The ratings could be negatively affected by a lack of underwriting discipline, which results in a trend of deteriorating underwriting and operating performance to a level below peers, or an erosion of surplus that causes a significant decline in risk-adjusted capital.
This press release relates to Credit Ratings that have been published on A.M. 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 A.M. 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.
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