OLDWICK, N.J.--(BUSINESS WIRE)--A.M. Best has upgraded the Financial Strength Rating to A (Excellent) from A- (Excellent) and the Long-Term Issuer Credit Rating to “a” from “a-” of The Service Insurance Company, Inc. (SIC) (West Orange, NJ).. The outlook of these Credit Ratings (ratings) has been revised to stable from positive.
The rating upgrades reflect SIC’s continued favorable operating trends and very strong risk-adjusted capitalization. The company has a long-standing tradition of producing favorable underwriting and operating returns in the surety market. SIC focuses primarily on smaller limit surety bonds and serves a variety of different business classes. The company’s risk-adjusted capitalization is aided by consistently favorable reserve development, solid underwriting and operating cash flows, consistent investment income and a comprehensive reinsurance profile.
These positive rating factors are offset by the company’s somewhat limited business profile. SIC is licensed currently in 19 states; however, over 90% of premiums relate to either New Jersey or New York, which exposes it to competitive, regulatory and legislative market pressures. Additionally, the company has witnessed a minor uptick in underwriting expenses in recent years. These increased expenses reflect expansion initiatives and internal technology updates. While the company continues to expand its geographical footprint, it continues to practice the same conservative underwriting techniques that have led to its past success.
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