AM Best Affirms Credit Ratings of The American Road Insurance Company

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” (Excellent) of The American Road Insurance Company (TARIC) (Dearborn, MI). The outlook of these Credit Ratings (ratings) is stable.

The ratings reflect TARIC’s balance sheet strength, which AM Best assesses as strongest, as well as its adequate operating performance, neutral business profile and appropriate enterprise risk management.

TARIC is part of an insurance holding company system wholly owned by Ford Motor Credit Company LLC (Ford Credit), which in turn is an indirect, wholly owned subsidiary of Ford Motor Company (Ford) [NYSE: F].

Although TARIC holds a general business license, it operates much like a captive, providing a variety of coverages directly to Ford or Ford Credit, primarily collateral protection automobile floorplan, inland marine, contractual liability insurance for extended service contracts, direct commercial auto liability, direct general liability and surety bonds. In addition to these operational synergies, TARIC also benefits from the efficiencies gained by its immediate access to business and low acquisition costs.

The stable outlooks reflect AM Best’s expectation that TARIC’s rating fundamentals will remain unchanged over the intermediate term despite some expected business contraction from COVID-19. Risk-adjusted capitalization is expected to remain at the strongest level, as measured by Best’s Capital Adequacy Ratio (BCAR), due to the company's conservative capital management. While the outlooks also consider some of the more pronounced pandemic-related challenges, such as semiconductor supply shortages and a continued interruption of unit production throughout the remainder of the year and into early 2022, operating performance is projected to remain profitable. Additionally, innovation in all operational phases and the company's risk management are aligned with the business objectives of Ford, which will continue to benefit TARIC.

This press release relates to Credit Ratings that have been published on AM Best’s website. For all rating information relating to the release and pertinent disclosures, including details of the office responsible for issuing each of the individual ratings referenced in this release, please see AM Best’s Recent Rating Activity web page. For additional information regarding the use and limitations of Credit Rating opinions, please view Guide to Best's Credit Ratings. For information on the proper use of Best’s Credit Ratings, Best’s Preliminary Credit Assessments and AM Best press releases, please view Guide to Proper Use of Best’s Ratings & Assessments.

AM Best is a global credit rating agency, news publisher and data analytics provider specializing in the insurance industry. Headquartered in the United States, the company does business in over 100 countries with regional offices in London, Amsterdam, Dubai, Hong Kong, Singapore and Mexico City. For more information, visit www.ambest.com.

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