OLDWICK, N.J.--(BUSINESS WIRE)--A.M. Best has removed from under review with positive implications and upgraded the Financial Strength Rating to A- (Excellent) from B++ (Good) and the Long-Term Issuer Credit Rating to “a-” from “bbb+” of Great Plains Casualty, Inc. (Great Plains) (Cedar Rapids, IA). The outlook assigned to these Credit Ratings (ratings) is stable.
The ratings of Great Plains were placed under review on Oct. 13, 2017 in conjunction with the release of the updated Best’s Credit Rating Methodology (BCRM). The ratings have been removed from under review, as A.M. Best has completed its analysis of Great Plains under the updated BCRM.
The ratings reflect Great Plains’ balance sheet strength, which A.M. Best categorizes as very strong, based on its limited size, as well as its strong operating performance, limited business profile and appropriate enterprise risk management (ERM).
Balance sheet strength is supported by the company’s risk-adjusted capitalization being at the strongest level, excellent liquidity, modest underwriting and investment leverage, and strength of reserves. Surplus has grown steadily over the company’s 10-year history at a compounded annual growth rate of 8.8%. The ratings also consider the financial leverage and interest coverage of parent company, Hillcrest Holdings, Inc., which had manageable debt levels as of Dec. 31, 2017.
Great Plains continues to report favorable operating performance, primarily driven by excellent underwriting results. The company’s 5- and 10-year average combined ratios outperform the averages for the commercial automobile composite by 30 points. Great Plains’ business profile is assessed as limited, due to its narrow market focus on the commercial auto sector and its reliance on a sister company, CRST International Inc. (CRST), for business. Great Plains derives its customer base from the independent contractors affiliated with CRST, which provides transportation solutions and services to manufacturers and distributors in the United States and Canada.
Great Plains utilizes an ERM program that A.M. Best considers to be appropriate relative to its inherent risks. The company benefits from the expertise gained by having common management between Great Plains and CSRT.
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. For information on the proper media use of Best’s Credit Ratings and A.M. Best press releases, please view Guide for Media - Proper Use of Best’s Credit Ratings and A.M. Best Rating Action Press Releases.
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