OLDWICK, N.J.--(BUSINESS WIRE)--AM 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 United Heritage Property & Casualty Company (UHPC) (Meridian, ID).
The Credit Ratings (ratings) reflect UHPC’s balance sheet strength, which AM Best categorizes as strong, as well as its marginal operating performance, limited business profile and marginal enterprise risk management (ERM).
The revised outlooks to stable reflect AM Best’s expectation of UHPC maintaining strong balance sheet strength and exhibiting improvement in underwriting performance given continued enhancement of its ERM program through effective concentration management, as well as maintaining strong agency relationships.
UHPC’s balance sheet strength reflects the strongest level of risk-adjusted capitalization, as measured by Best’s Capital Adequacy Ratio (BCAR), partially offset by limited surplus growth due to underwriting losses and ongoing dividend payments.
UHPC’s operating performance has trended downward in recent years, largely due to weather events and above average auto losses, which has resulted in underwriting results comparing unfavorably with the composite on a five-year average basis. UHPC operates in four states with a product concentration in homeowners, private passenger automobile and farmowners lines of business. AM Best views UHPC’s ERM as marginal due to some risk management capabilities not being aligned with the overall risk profile of the company; however, there has been an increased focus to formalize and enhance the ERM framework including exposure management and expanded reinsurance protection.
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