OLDWICK, N.J.--(BUSINESS WIRE)--A.M. Best has revised the outlooks to stable from negative and affirmed the Financial Strength Rating of B+ (Good) and the Long-Term Issuer Credit Rating of “bbb-” of Aspire General Insurance Company (Aspire General) (Rancho Cucamonga, CA).
The ratings reflect Aspire General’s balance sheet strength, which A.M. Best categorizes as adequate, as well as its marginal operating performance, limited business profile and appropriate enterprise risk management.
The revised outlooks to stable from negative reflect Aspire General’s strong risk-adjusted capitalization, improved operating performance in recent years and senior management’s operating experience and in-depth knowledge of California’s private passenger non-standard automobile market. Additionally, the company is technologically advanced for its size and utilizes predictive analytics in decision making with a heavy emphasis on managing loss frequency. Furthermore, data analytics and point-of-sale tools are used to quickly target profitable segments and swiftly react to new business rate needs. Lastly, ownership has contributed capital to Aspire General in recent years to support new business growth, along with increasing its quota share cession in 2018 for surplus relief.
Partially offsetting these positive ratings factors are Aspire General’s above-average underwriting leverage, below-average liquidity measures and high reinsurance dependence. The company also has execution risk as a start-up, associated with growing its private passenger non-standard automobile book of business, a segment in which smaller insurance writers have experienced a material deterioration in operating results and policyholders’ surplus in recent years. The general deterioration in the non-standard automobile line of business has been partially driven by economic conditions, significant price competition and adverse selection from large personal automobile writers with greater scale and pricing granularity.
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