OLDWICK, N.J.--(BUSINESS WIRE)--A.M. Best has assigned a Financial Strength Rating (FSR) of A- (Excellent) and a Long-Term Issuer Credit Rating (Long-Term ICR) of “a-” to Blue Ridge Indemnity Company (Blue Ridge) (headquartered in Jacksonville, FL). The outlook assigned to these Credit Ratings (ratings) is stable. Concurrently, A.M. Best has affirmed the FSR of A- (Excellent) and the Long-Term ICRs of “a-” of the rated operating subsidiaries of Fortegra Financial Corporation (Fortegra) (headquartered in Jacksonville, FL). Fortegra is a wholly owned subsidiary of Tiptree Inc. [NASDAQ:TIPT]. The property/casualty operating subsidiaries of Fortegra include Lyndon Southern Insurance Company (Wilmington, DE), Insurance Company of the South (Athens, GA), Response Indemnity Company of California (Redondo Beach, CA) and Blue Ridge, which operate under an intercompany pooling agreement and are collectively referred to as Fortegra P&C Group. The life/health operating subsidiaries of Fortegra include Life of the South Insurance Company (Athens, GA), Bankers Life of Louisiana (Marksville, LA) and Southern Financial Life Insurance Company (Scottsville, KY), which are collectively referred to as the Life of the South Group. The outlook of these ratings is stable.
The ratings of Fortegra P&C Group reflect its balance sheet strength, which A.M. Best categorizes as very strong, as well as its adequate operating performance, neutral business profile and appropriate enterprise risk management (ERM).
Fortegra P&C Group’s balance sheet strength is reflective of its strongest level of risk-adjusted capitalization, prudent investment portfolio and comprehensive reinsurance program. Partially offsetting these positive factors are the substantial reliance on third-party reinsurance to provide capacity, which is demonstrated by its extremely high ceded underwriting leverage, somewhat mitigated by the use of collateral and modest loss reserve volatility.
Fortegra P&C Group’s operating performance is categorized as adequate. The group has produced solid operating earnings over the past five years, primarily driven by profitable underwriting results coupled with growing investment earnings. The group’s business profile is considered neutral due to its solid geographic and product spread of risk. A.M. Best acknowledges the appropriate ERM program for the Fortegra P&C Group organization, as it has developed a formalized process with risk identification, management and mitigation.
Blue Ridge’s ratings reflect its participation in the group’s reinsurance pooling agreement, being fully integrated with shared underwriting systems, operations, and management.
The ratings of the Life of the South Group reflect its balance sheet strength, which A.M. Best categorizes as strong, as well as its adequate operating performance, neutral business profile and appropriate ERM.
The ratings of the Life of the South Group acknowledge its strong consolidated balance sheet strength that includes the strongest level of risk-adjusted capitalization. The ratings also recognize the group’s adequate net operating performance, derived primarily from its profitable credit life and credit accident and health businesses, and stable premium trends. A.M. Best believes the group may be challenged to sustain and improve its net operating performance given the challenges of the persistent low interest rate environment and the expense strains expected from anticipated new business growth. The Life of the South Group’s business profile is neutral with good market positioning for its lines of business, although the products are concentrated in credit life and health offerings. Life of the South Group’s ERM is managed across Fortegra’s operations and is considered appropriate.
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