OLDWICK, N.J.--(BUSINESS WIRE)--AM Best has revised the outlook to positive from stable for the Long-Term Issuer Credit Rating (Long-Term ICR) and affirmed the Financial Strength Rating (FSR) of B++ (Good) and the Long-Term ICR of “bbb” of Lebanon Valley Insurance Company (Lebanon Valley) (Wyalusing, PA). The outlook of the FSR remains stable.
These Credit Ratings (ratings) reflect Lebanon Valley’s balance sheet strength, which AM Best categorizes as strong, as well as its marginal operating performance, limited business profile and appropriate enterprise risk management (ERM).
The revision in the Long-Term ICR outlook to positive reflects improvement in underwriting and operating performance results in recent years, driven by management’s corrective actions and strict underwriting guidelines. These actions, combined with a prudent reinsurance program, have led to improved profitability from earlier years. AM Best’s expectation is for Lebanon Valley’s favorable trend in operating performance to continue while it maintains strong balance sheet strength.
Lebanon Valley’s balance sheet strength reflects the strongest level of risk-adjusted capitalization, as measured by Best’s Capital Adequacy Ratio, and historically favorable reserve development, partially offset by its limited size and scale. The limited business profile reflects its geographically concentrated position in Pennsylvania. Lebanon Valley benefits from an appropriate ERM program that is shared with Tuscarora Wayne Companies, which supports the organization’s risk profile.
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