AM Best Revises Outlooks to Positive for Aspire General Insurance Company

OLDWICK, N.J.--(BUSINESS WIRE)--AM Best has revised the outlooks to positive from stable and affirmed the Financial Strength Rating of B+ (Good) and the Long-Term Issuer Credit Rating of “bbb-” (Good) of Aspire General Insurance Company (Aspire General) (Rancho Cucamonga, CA).

These Credit Rating (ratings) reflect Aspire General’s balance sheet strength, which AM Best assesses as adequate, as well as its marginal operating performance, limited business profile and appropriate enterprise risk management.

The revised outlooks to positive from stable reflect Aspire General’s improved underwriting and operating performance in recent years starting in 2018, largely driven by management’s numerous initiatives to enhance profitability, namely the termination of agencies with excessive loss ratios and the implementation of rate increases. Additionally, the company is technologically advanced for its size and utilizes predictive analytics in its decision-making process with a heavy emphasis on managing loss frequency. Furthermore, data analytics and point-of-sale tools are used to target profitable segments and swiftly react to new business rate needs. Lastly, ownership has contributed capital to Aspire General in recent years to support new business growth for surplus relief.

Partially offsetting the positive factors are Aspire General’s above-average underwriting leverage, limited scale of operations and high reinsurance dependence. The elevated underwriting leverage has been impacted by significant direct writings driven by policy growth and the implementation of rate increases on its Savings and Advantage products. However, ownership has made capital contributions in recent years to support the business growth plans. In addition, the company’s surplus growth has been consistent in recent years, primarily due to profitable operating results. Overall, the company is facing some challenges in the current California environment for non-standard automobile line driven by economic conditions, significant price competition and adverse selection from large personal automobile writers with greater scale and pricing granularity. However, the company relies on its experienced management team and highly rated reinsurers to manage its risks and remain profitable.

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