OLDWICK, N.J.--(BUSINESS WIRE)--AM Best has upgraded the Financial Strength Rating to A- (Excellent) from B++ (Good) and the Long-Term Issuer Credit Rating to “a-” (Excellent) from “bbb+” (Good) of Columbia Lloyds Insurance Company and MDOW Insurance Company, which are collectively referred to as Columbia Lloyds Companies (Columbia Lloyds). Both companies are domiciled in Houston, TX. The outlook of these Credit Ratings (ratings) has been revised to stable from positive.
The ratings reflect Columbia Lloyds’ balance sheet strength, which AM Best assesses as very strong, as well as its strong operating performance, limited business profile and appropriate enterprise risk management (ERM).
The upgrades reflect underwriting and operating performance metrics that have consistently outperformed the personal property composite averages. Results reflect management’s focus on maintaining a profitable book of business, which has been refined through active exposure management and strict underwriting guidelines. Columbia Lloyds reported underwriting income in each of the last five calendar years, driving pretax operating income and formidable return measures. Consequently, the group has proven its ability to grow policyholders’ surplus organically through core operations.
Columbia Lloyds’ overall balance sheet strength reflects the strongest level of risk-adjusted capitalization, as measured by Best’s Capital Adequacy Ratio (BCAR), and traditionally redundant loss reserve position, partially offset by above-average dependence on reinsurance, as measured by ceded leverage. The assessment of limited on its business profile reflects the group’s product and geographic concentrations in Texas. Columbia Lloyds also maintains an appropriate ERM program that supports the risk profile of the organization.
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