OLDWICK, N.J.--(BUSINESS WIRE)--AM Best has affirmed the Financial Strength Rating of A (Excellent) and the Long-Term Issuer Credit Rating of “a” of Protective Property & Casualty Insurance Company (Protective) (St. Louis, MO). The outlook of these Credit Ratings (ratings) remains stable.
The ratings reflect Protective’s balance sheet strength, which AM Best categorizes as very strong, as well as its adequate operating performance, neutral business profile and appropriate enterprise risk management (ERM). The ratings also reflect the rating lift from its parent, Protective Life Insurance Company.
Protective specializes in providing coverage for vehicle service contracts and guaranteed asset protection products sold primarily through franchise dealers and independent agents. AM Best’s balance sheet strength assessment is based on the strongest level of risk-adjusted capitalization, as measured by Best’s Capital Adequacy Ratio (BCAR), as well as good asset quality and adequate balance sheet liquidity, partially offset by the company’s significant use of unrated affiliated producer-owned reinsurers. AM Best considers Protective’s operating performance to be adequate based on its consistent track record of profitability that is on par with its composite peer group of warranty insurers. The neutral business profile is based on the company’s concentration of underwriting risk in auto warranty lines, offset by geographic diversification. Given the company’s successful operations throughout the United States, AM Best considers its emerging ERM program to be adequate for its size and scope of operations. Rating enhancement has been afforded due to the implied support from Protective’s higher-rated parent, its integration into the organization and its support of the organization’s asset protection strategy.
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