AM Best Affirms Credit Ratings of Protective Insurance Corporation and Its Subsidiaries
August 23 2019 - 12:15PM
Business Wire
AM Best has affirmed the Financial Strength Rating (FSR)
of A (Excellent) and the Long-Term Issuer Credit Ratings (Long-Term
ICR) of “a” of Protective Insurance Company (PIC) and its wholly
owned subsidiary, Sagamore Insurance Company (Sagamore). These
companies collectively are referred to as Protective Insurance
Corporation Group. AM Best also has affirmed the FSR of A
(Excellent) and the Long-Term ICR of “a” of Protective Specialty
Insurance Company (Protective Specialty). Concurrently, AM Best has
affirmed the Long-Term ICR of “bbb” of Protective Insurance
Corporation, the organization’s publicly traded ultimate parent
[NASDAQ: PTVCA, PTVCB]. The outlook of these Credit Ratings
(ratings) remains negative. All companies are domiciled in Carmel,
IN.
The ratings reflect the group’s balance sheet strength, which AM
Best categorizes as very strong, as well as its adequate operating
performance, neutral business profile and appropriate enterprise
risk management (ERM).
The ratings of Protective Specialty reflect its balance sheet
strength, which AM Best categorizes as very strong, as well as its
marginal operating performance, very limited business profile and
appropriate ERM.
The group reported underwriting losses in 2017, 2018 and the
first six months of 2019 due to increased loss costs in the
commercial auto sector. It also had three consecutive years of
adverse reserve development. The new management team has taken
remedial actions, including rate increases, re-underwriting the
book of business and exiting unprofitable segments. The negative
outlooks reflect the challenge the company is facing in a sector
with loss cost trends that continue to rise, as well as the
execution risks of its turnaround efforts. AM Best expects
management to continue implementing the current strategy of
improving its underwriting and reserving, while strengthening its
ERM capabilities. The turnaround efforts could take one to two
years to manifest itself in its financial results.
This press release relates to Credit Ratings that have been
published on AM 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 AM 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 AM Best press releases, please view Guide
for Media - Proper Use of Best’s Credit Ratings and AM Best Rating
Action Press Releases.
AM Best is a global rating agency and information provider
with a unique focus on the insurance industry. Visit www.ambest.com
for more information.
Copyright © 2019 by A.M. Best Rating
Services, Inc. and/or its affiliates. ALL RIGHTS RESERVED.
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version on businesswire.com: https://www.businesswire.com/news/home/20190823005287/en/
Jieqiu Fan Senior Financial Analyst +1 908 439 2200, ext.
5372 jieqiu.fan@ambest.com
Susan Molineux Director +1 908 439 2200, ext.
5829 susan.molineux@ambest.com
Christopher Sharkey Manager, Public Relations +1 908 439
2200, ext. 5159 christopher.sharkey@ambest.com
Jim Peavy Director, Public Relations +1 908 439
2200, ext. 5644 james.peavy@ambest.com
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