OLDWICK, N.J.--(BUSINESS WIRE)--AM 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 Kentucky Growers Insurance Company (KGIC) (Lexington, KY).
The ratings reflect KGIC’s balance sheet strength, which AM Best categorizes as very strong, as well as its adequate operating performance, limited business profile and appropriate enterprise risk management.
The revised outlooks reflect KGIC’s strengthening risk-adjusted capitalization over the past five years, accompanied by favorable trends in key metrics of balance sheet strength such as policyholders’ surplus growth, underwriting leverage and liquidity measures.
Additionally, the ratings reflect KGIC’s adequate operating performance, driven by key metrics of total operating earnings (pre-tax return on revenue; return on surplus; operating ratio), each of which is solidly in line with the personal property industry composite five-year average. The ratings also reflect KGIC’s business profile, which is limited by its single-state concentration in Kentucky, which exposes results to frequent and severe weather-related events, as well as potential judicial, economic, competitive and regulatory challenges.
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