A.M. Best has affirmed the Financial Strength Rating
(FSR) of A+ (Superior) and the Long-Term Issuer Credit Ratings
(Long-Term ICR) of “aa-” of Old Republic Insurance Company
(Greensburg, PA) and Old Republic Lloyds of Texas (Dallas,
TX) (collectively referred to as Old Republic Insurance
Companies [ORINSCO]); BITCO General Insurance
Corporation and BITCO National Insurance Company (both
domiciled in Rock Island, IL) (collectively referred to as BITCO
Insurance Companies); and Great West Casualty Company
(Great West) (South Sioux City, NE).
Additionally, A.M. Best has affirmed the FSR of A (Excellent)
and the Long-Term ICRs of “a” of Old Republic General Insurance
Corporation (ORGENCO) (Chicago, IL) and Old Republic Surety
Company (ORSC) (Brookfield, WI). A.M. Best also has affirmed
the FSR of A (Excellent) and the Long-Term ICRs of “a” of
Pennsylvania Manufacturers’ Association Insurance Company
(Blue Bell, PA), Manufacturers Alliance Insurance Company
(Blue Bell, PA) and Pennsylvania Manufacturers Indemnity
Company (Blue Bell, PA) (collectively referred to as the PMA
Insurance Group) (PMA); Old Republic National Title
Insurance Company (Tampa, FL) and American Guaranty Title
Insurance Company (Oklahoma City, OK) (collectively referred to
as the Old Republic Title Insurance Group [ORTIG]); and
Old Republic Union Insurance Company (Old Republic Union)
(Chicago, IL).
At the same time, A.M. Best has affirmed the FSR of A
(Excellent) and Long-Term ICR of “a+” of Old Republic Insurance
Company of Canada (Old Republic Canada) (Hamilton, Ontario).
Additionally, A.M. Best has affirmed the FSR of B++ (Good) and
Long-Term ICR of “bbb+” of Old Republic Life Insurance
Company (Old Republic Life) (Chicago, IL). The outlook for all
of these Credit Ratings (ratings) is stable. All companies are
subsidiaries of Old Republic International Corporation
[NYSE: ORI].
The ratings of ORINSCO reflect the group’s strong risk-adjusted
capitalization, excellent historical profitability and its flagship
carrier lead position within the Old Republic General Insurance
Group segment. ORINSCO benefits from its expertise within the
alternative risk transfer (ART) market and specialty commercial
segments, as well as management’s emphasis on loss control,
commitment to delivering quality insurance-related services and by
limiting, over the past few years, its exposure to unprofitable
business. Partially offsetting these positive rating factors are
ORINSCO’s concentration in the increasingly competitive workers’
compensation line and significant reinsurance recoverables. To a
lesser degree, the company remains exposed to asbestos liabilities
and maintains an above-average common stock leverage position.
The ratings of BITCO Insurance Companies reflect the group’s
strong risk-adjusted capitalization, conservative balance sheet,
evidenced by consistently favorable prior accident year
development, and solid overall liquidity. The ratings also reflect
the group’s historical operating performance, which benefits from
its loss control and risk management expertise as a specialty
underwriter of risk transfer programs for the construction, oil and
gas extraction and forest products industries. These positive
rating factors are partially offset by the ongoing challenging
workers’ compensation and commercial automobile liability markets,
given increasing competition and higher loss trends, as well as the
company’s concentration in industries exposed to U.S. economic
cycles. To a lesser degree, BITCO also maintains above-average
common stock leverage.
The ratings of Great West reflect its excellent risk-adjusted
capitalization, conservative balance sheet, trend of strong
underwriting and operating profitability, and its specialty niche
underwriting expertise as a leading commercial automobile insurer.
These positive rating factors are partially offset by its business
concentration in commercial trucking, which has experienced
increases in severe losses. The company maintains above-average
common stock investment portfolio leverage position.
ORGENCO’s ratings reflect its supportive risk-adjusted capital
position and historically strong operating performance which
benefit from the ceding commissions received from affiliates. These
positive rating factors are partially offset by the company’s
concentrated source of business and its above-average common stock
leverage position.
The ratings of PMA reflect its expertise in providing workers’
compensation insurance, and, to a lesser degree, other commercial
coverages to mid- to large-size businesses in select industries and
the financial and operational support being provided by its
affiliates. These positive rating factors are somewhat offset by
PMA Group’s product concentration in workers’ compensation
coverages and continued adverse prior-year loss reserve
development.
The ratings of ORTIG recognize its strong liquidity and
reserving practices, which remain among the most conservative in
the title industry. While the group has substantially increased its
premium volume in recent years, operating results have trended
favorably since 2010 as a result of its improved underwriting
performance, and enhanced the group’s presence, allowing it to
become more competitive. Somewhat offsetting these positive rating
factors are the challenges ORTIG faces in order to maintain its
positive trend of improved operating performance and risk-adjusted
capitalization. Another offsetting rating factor is the group’s
higher underwriting leverage measures due to the rapid increase in
premium volume over the past five years.
The ratings of Old Republic Canada are based on its strong
risk-adjusted capitalization and solid operating performance, as
well as the support from the synergies it realizes as an affiliate
of Great West. Partially offsetting these positive rating factors
are the company’s narrow product offering, the current soft market
conditions and challenging judicial environment in Canada, which
have translated into the company’s recent below average operating
performance.
The ratings of Old Republic Union reflect the explicit support
being provided by Old Republic General Insurance Group and the
company’s strategic role within the organization. The ratings
also acknowledge the company’s excellent risk-adjusted
capitalization. These positive rating factors are somewhat offset
by Old Republic Union’s limited business profile.
The ratings of ORSC reflect its excellent operating performance,
solid risk-adjusted capitalization, strict underwriting controls
and conservative loss reserving practices. These strengths are
offset by ORSC’s modest business profile, elevated underwriting
expense ratio and increased severe losses recognized in 2016.
The ratings of ORL reflect its strong level of risk-adjusted
capitalization and low percentage of interest-sensitive
liabilities. Partially mitigating factors include its modest
business profile, with most life insurance product lines in run-off
mode and lower investment income. Earnings trends have been
generally lower in recent years, although earnings in the current
year increased due to higher premium, and favorable mortality and
disability experience.
There have been concerns in recent years regarding the
uncertainties associated with ORI’s run-off of its mortgage
insurance and consumer credit indemnity insurance books of
business. These concerns have moderated given the recent
improvement in ORI’s run-off books of business, improved
consolidated earnings and solid overall liquidity, as well as A.M.
Best’s expectation that the run-off books of business will continue
to play less of a role in relation to ORI’s continuing operations.
Additionally, ORI maintains relatively strong interest coverage and
modest debt-to-total capital ratios.
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.
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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version on businesswire.com: http://www.businesswire.com/news/home/20170413006037/en/
A.M. BestDarian RyanSenior Financial
Analyst—P/C+1 908 439 2200, ext.
5449darian.ryan@ambest.comorFrank
WalkoFinancial Analyst—L/H+1 908 439 2200, ext.
5072frank.walko@ambest.comorChristopher
SharkeyManager, Public Relations+1 908 439 2200, ext.
5159christopher.sharkey@ambest.comorJim
PeavyDirector, Public Relations+1 908 439 2200, ext.
5644james.peavy@ambest.com
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