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 Sublimity Insurance Company (SIC) (Sublimity, OR).
The Credit Ratings (ratings) reflect SIC’s balance sheet strength, which AM Best categorizes as strong, as well as its adequate operating performance, limited business profile and marginal enterprise risk management (ERM).
The revised outlooks to stable reflect AM Best’s expectation of Sublimity maintaining strong balance sheet strength and demonstrating further improvement in underwriting performance given continued enhancement of its ERM program through effective concentration management, as well as maintaining strong agency relationships.
Sublimity’s balance sheet strength reflects the strongest level of risk-adjusted capitalization, as measured by Best’s Capital Adequacy Ratio (BCAR), and generally favorable reserve development, partially offset by elevated underwriting leverage metrics and above average reinsurance dependence.
Sublimity’s operating performance continues to experience volatility, largely due to weather events; however, the five-year average combined ratio remains comparable with the composite. Sublimity operates in three states with a concentration in private passenger automobile and homeowners lines of business. AM Best views Sublimity’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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