AM Best reports that it has revised the outlooks to positive from stable and affirmed the Fi
nancial Strength Rating (FSR) of A- (Excellent) and the Long-Term Issuer Credit Rating (Long-Term ICR) of “a-” (Excellent) for the members of Plymouth Rock Assurance Group (PRAG).
At the same time, AM Best has affirmed the FSR of A- (Excellent) and the Long-Term ICR of “a-” (Excellent) of the members of Plymouth Rock Ho
me Assurance Group (PRHAG). AM Best’s outlook of these credit ratings is stable.
According to AM Best analysts, the ratings of PRAG reflect its balance sheet strength, which they assess as very strong, as well as its adequate operating pe
rformance, limited business profile and appropriate enterprise risk management (ERM).
The revision in PRAG’s outlooks to positive from stable reflects its “solid market presence in the northeastern United States as a leading writer of priv
ate passenger auto (PPA
) business, particularly in Massachusetts, as well as its diverse and well-managed distribution strategy and strong brand recognition as a part of the Plymouth Rock family.”
Although the group is geographically concentrated in Massachusetts, which exposes results to potentially frequent and severe weather, as wel
l as regulatory impacts, AM Best notes that PRAG continues to improve its spread of ris
k and expand to states such as New York, Connecticut and Pennsylvania. While doing so, PRAG’s PPA market share in its primary state of Massachusetts has grown to over 8% “owing to profitable and effective business growth.”
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Additionally,the group diversifies its product offerings through its wholly owned subsidiary, Pi
lgrim Insurance Co., which provides stability as a residual market servicing carrier.
“With continued refinement to the book of business, as well as effective growth that further diversifies the group’s geographic footprint and product o
fferings, near-term upward movement on the business profile assessment is likely,” AM Best continued. “The profile is further enriched by a robust distr
ibution network and increased marketability through its affiliation with PRHAG and the ability to provide auto customers a packaged product.”
The ratings of PRHAG reflect its balance sheet strength, which AM Best assesses as very strong, a
s well as its adequate operating performance, limited business profile and appropriate ERM.
AM Best said the stable outlooks for PRHAG reflect the group’s strongest level of risk-adjusted capitalization, as measured by Best’s Capital Adequacy Ratio (
BCAR), and consistency in policyholders’ surplus growth over the past five-year period, partially offset by adverse loss reserving trends in some recent years and historically high equity leverage.
