A.M. Best Affirms Credit Ratings of Members of Ally Insurance Group
August 16 2017 - 3:02PM
Business Wire
A.M. Best has affirmed the Financial Strength Rating of
B++ (Good) and the Long-Term Issuer Credit Ratings of “bbb+” of the
members of the Ally Insurance Group (Ally Insurance). The
members include Motors Insurance Corporation and its
reinsured subsidiaries, MIC Property and Casualty Insurance
Corporation and CIM Insurance Corporation, as well as an
affiliate, Ally International Insurance Company, Ltd.
(AIICL). The outlook of these Credit Ratings (rating) is stable.
All companies are domiciled in Detroit, MI, except AIICL, which is
domiciled in Bermuda.
The ratings reflect Ally Insurance’s supportive balance sheet
strength, positive earnings and well-established market presence as
a specialized underwriter of vehicle service contracts (VSC). These
positive rating factors are offset somewhat by the credit profile
of its ultimate parent, Ally Financial Inc. (Ally
Financial), which is rated below investment grade by other
nationally recognized statistical rating organizations, and to a
lesser extent, by the group’s below-average profitability and
concentration of underwriting risk in auto warranty lines. The
ratings also consider the group’s higher-than-average expense
structure and susceptibility to weather-related losses, which have
contributed to a decline in underwriting performance in recent
years.
Ally Insurance’s positive rating attributes are derived from
management’s focused operating strategy, extensive product
knowledge and established track record of solid earnings generated
from its long-term VSC business. The group has consistently
generated capital through operating earnings reflective of
disciplined underwriting, and a steady stream of investment income
and realized gains. However, results in recent years have been
marred by losses on its automobile physical damage line due to
severe weather events.
Management is committed to maintaining risk-adjusted capital at
a level consistent with its ratings. Operating results should
improve as a result of expansion outside of General Motors-related
business, its transition to an independent finance and insurance
provider, and due to additional property catastrophe reinsurance
protection.
Factors that may lead to positive rating actions include
improved underwriting performance that benefits from reduced
catastrophe losses and outperforms peers over time, and continued
improvement in the ratings of Ally Financial.
Factors that could lead to negative rating actions include
operating performance being impacted negatively by underwriting
losses stemming from a significant increase in catastrophe losses,
which causes a decline in risk-adjusted capital that no longer
supports the current ratings, or a downgrade in the published
credit ratings or CDS prices of Ally Financial.
This press release relates to Credit Ratings that have been
published on A.M. 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 A.M.
Best’s Recent Rating Activity web page. For
additional information regarding the use and limitations of Credit
Rating opinions, please view Understanding Best’s Credit
Ratings. For information on the proper media use of Best’s
Credit Ratings and A.M. Best press releases, please view
Guide for Media - Proper Use of Best’s Credit Ratings and A.M.
Best Rating Action Press Releases.
A.M. Best is the world’s oldest and most authoritative
insurance rating and information source. For more information,
visit www.ambest.com.
Copyright © 2017 by A.M. Best Rating
Services, Inc. and/or its subsidiaries. ALL RIGHTS
RESERVED.
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A.M. BestEdward J. Zonenberg, +1 908-439-2200, ext.
5135Senior Financial
Analystedward.zonenberg@ambest.comorChristopher Sharkey, +1
908-439-2200, ext. 5159Manager, Public
Relationschristopher.sharkey@ambest.comorCharles M. Huber,
+1 908-439-2200, ext.
5122Directorcharles.huber@ambest.comorJim Peavy, +1
908-439-2200, ext. 5644Director, Public
Relationsjames.peavy@ambest.com