OLDWICK, N.J.--(BUSINESS WIRE)--A.M. Best has upgraded the Financial Strength Rating to B++ (Good) from B+ (Good) and the Long-Term Issuer Credit Rating to “bbb” from “bbb-” of Aventus Insurance Company (Aventus) (formerly known as Wellington Insurance Company) (Fort Worth, TX). The outlook of these Credit Ratings (ratings) has been revised to stable from positive.
The ratings upgrades reflect Aventus’ improved profitability and more consistent operating results in recent years. Aventus’ surplus has grown in each of the past five years, driven by better-than-average underwriting performance that resulted in the company reporting operating returns that were notably higher than the composite average. The company’s refined profitability-focused initiatives, which include continuous rate reviews and the increased use of predictive modeling, allow the company to write business in coastal counties in Texas without sacrificing stability. Aventus’ business is produced and underwritten by Wellington Risk Insurance Agency, Inc., which has common ownership with the company. Through the agency, customers are provided with additional rate flexibility and broader product options from Aventus and other carriers. The group of companies has successfully operated in the Texas property market for many years.
These positive rating factors are partially offset by Aventus’ property-focused book of business in Texas, fluctuating reserve adequacy and heavy reinsurance dependence that is in place to help mitigate weather-related losses. However, the reinsurance risk is partially mitigated by the high quality and diverse panel of reinsurers that participate in the program.
Additional positive rating action could occur if the company produces consistent underwriting and operating profitability, which leads to organic surplus growth and improved risk-adjusted capitalization. Negative rating action could occur if the company incurs a material reduction in its risk-adjusted capitalization or a severe deterioration in profitability.
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