OLDWICK, N.J.--(BUSINESS WIRE)--AM Best has upgraded the Financial Strength Rating to B (Fair) from B- (Fair) and the Long-Term Issuer Credit Rating to “bb+” from “bb-” of Southern General Insurance Company (SGIC) (Marietta, GA). The outlook of these Credit Ratings (ratings) has been revised to stable from positive.
The ratings reflect SGIC’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.
The rating upgrades are the result of favorable trends in SGIC’s balance sheet strength. This is due to improved policyholder surplus levels and underwriting leverage measures, and decreased common stock leverage. These positive factors are partially offset by historically unfavorable loss reserve development despite strengthening efforts in recent years. Furthermore, the rating upgrades reflect favorable trends in operating performance resulting from underwriting initiatives to improve rate adequacy and risk selection, as well as improvements in claims operations. Although the expense ratio remains elevated compared with the composite, it has been on a downward trend and is a contributing factor to the improved underwriting performance. Additionally, the company has limited scale of operations. SGIC’s business profile is limited due to its product offering and geographic concentration of risk.
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