A.M. Best Affirms Ratings of Allstate New Jersey Insurance Group Members
February 25 2015 - 11:40AM
Business Wire
A.M. Best has affirmed the financial strength rating
(FSR) of A- (Excellent) and the issuer credit ratings (ICR) of “a-”
of the members of the Allstate New Jersey Insurance Group
(collectively referred to as Allstate New Jersey) (Bridgewater,
NJ). The outlook for all ratings is stable. Allstate New Jersey’s
ultimate parent is The Allstate Corporation (Allstate)
(Northbrook, IL) [NYSE: ALL]. (See below for a detailed listing of
the companies.)
The rating affirmations are based on Allstate New Jersey’s
favorable risk-adjusted capitalization, improved underwriting
trends and management’s local market knowledge. Allstate New Jersey
continues to undertake various actions to enhance its overall
operating results as the dedicated New Jersey property/casualty
carrier for Allstate. In addition, Allstate New Jersey’s operating
performance generally has benefited from its ability to quickly
react to changing market conditions. Furthermore, the group’s
private passenger automobile margins have improved due to recent
rate activity, new business acceptance criteria and renewal book
actions. To better match price with risk, Allstate New Jersey’s
recent actions to improve its homeowners’ business have included
rate increases, targeted customer/property inspections and a
reduction in mono-line homeowners’ exposure. These actions, coupled
with mild weather conditions, had a favorable impact on the group’s
operating performance in each of the past two years. Additionally,
the ratings acknowledge the operational and financial benefits
Allstate New Jersey receives as an affiliate of Allstate
Insurance Company, which is a market leader in the U.S.
property/casualty insurance industry.
Allstate New Jersey’s positive rating factors are somewhat
offset by its business concentration within one state, resulting in
potential operating variability due to local market disruptions and
localized catastrophic weather events. This exposure was evident in
earlier periods as its homeowners and auto physical damage lines of
business were negatively impacted by sizable net catastrophe
losses. However, to reduce surplus volatility, Allstate New Jersey
has maintained a conservative investment portfolio.
While the outlook for the ratings of Allstate New Jersey is
stable, positive rating action may result from improved
underwriting performance trends and capital preservation. The
ratings could be downgraded if underwriting performance and/or
capital levels fall materially short of A.M. Best’s
expectations.
The FSR of A- (Excellent) and ICRs of “a-” have been affirmed
for the following members of Allstate New Jersey Insurance
Group:
- Allstate New Jersey Insurance
Company
- Allstate New Jersey Property and
Casualty Insurance Company
- Encompass Insurance Company of New
Jersey
- Encompass Property and Casualty
Insurance Company of New Jersey
- Esurance Insurance Company of New
Jersey
The methodology used in determining these ratings is Best’s
Credit Rating Methodology, which provides a comprehensive
explanation of A.M. Best’s rating process and contains the
different rating criteria employed in the rating process. Best’s
Credit Rating Methodology can be found at
www.ambest.com/ratings/methodology.
Key insurance criteria reports utilized:
- Catastrophe Analysis in A.M. Best
Ratings
- Rating Members of Insurance Groups
- Risk Management and the Rating Process
for Insurance Companies
- Understanding BCAR for
Property/Casualty Insurers
This press release relates to rating(s) 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 visit A.M.
Best’s Ratings & Criteria Center.
A.M. Best Company is the world's oldest and most
authoritative insurance rating and information source. For more
information, visit www.ambest.com.
Copyright © 2015 by A.M. Best Company,
Inc. ALL RIGHTS RESERVED.
A.M. BestMichael T. Venezia, 908-439-2200, ext.
5034Senior Financial
Analystmichael.venezia@ambest.comorGary Davis, 908-439-2200,
ext. 5665Assistant Vice
Presidentgary.davis@ambest.comorChristopher Sharkey,
908-439-2200, ext. 5159Manager, Public
Relationschristopher.sharkey@ambest.comorJim Peavy,
908-439-2200, ext. 5644Assistant Vice President, Public
Relationsjames.peavy@ambest.com
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