A.M. Best Affirms Ratings of First Colonial Insurance Company
December 22 2010 - 11:09AM
Business Wire
A.M. Best Co. has affirmed the financial strength rating
of A- (Excellent) and issuer credit rating of “a-” of First
Colonial Insurance Company (First Colonial) (Jacksonville, FL).
The outlook for both ratings is stable. First Colonial’s ultimate
parent is The Allstate Corporation (Allstate) (Northbrook,
IL) (NYSE: ALL).
The ratings are based on First Colonial’s solid risk-adjusted
capitalization and explicit and implicit support provided by
Allstate. As a subsidiary of Allstate, First Colonial benefits from
the Allstate Insurance Group’s expansive market presence and
brand name recognition. First Colonial’s capital position reflects
its conservative investment risk profile and historical record of
financial support from its ultimate parent. In addition, the
company maintains modest underwriting leverage and an increased
risk-adjusted capital position that is further enhanced by
Allstate Insurance Company, which assumed a large book of
auto roadside business ($69.0 million in premiums) that was
previously assumed by First Colonial.
Partially offsetting these positive rating attributes is First
Colonial’s underwriting volatility in recent years and challenges
to sales growth. Although First Colonial’s underwriting results
have shown improvement recently, economic factors and the impact on
auto sales will continue to influence its underwriting
performance.
The principal methodology used in determining these ratings is
Best’s Credit Rating Methodology -- Global Life and Non-Life
Insurance Edition, which provides a
comprehensive explanation of A.M. Best’s rating process and
highlights the different rating criteria employed. Additional key
criteria utilized include: “Risk Management and the Rating Process
for Insurance Companies”; “Understanding BCAR for Property/Casualty
Insurers”; and “Rating Members of Insurance Groups.” Methodologies
can be found at www.ambest.com/ratings/methodology.
Founded in 1899, 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 © 2010 by A.M. Best Company,
Inc. ALL RIGHTS RESERVED.
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