A.M. Best Affirms Ratings of Allstate New Jersey Insurance Group and Its Members
February 15 2012 - 10:52AM
Business Wire
A.M. Best Co. has affirmed the financial strength rating
(FSR) of A- (Excellent) and issuer credit ratings (ICR) of “a-” of
Allstate New Jersey Insurance Group (Allstate New Jersey)
(headquartered in Bridgewater, NJ) and its members. The outlook for
all ratings is stable. Allstate New Jersey’s ultimate parent is
The Allstate Corporation (Northbrook, IL) [NYSE: ALL]. (See
below for a detailed listing of the companies.)
The rating affirmations are based on Allstate New Jersey’s solid
risk-adjusted capitalization and management’s local market
knowledge. Allstate New Jersey continues to undertake various
actions to enhance its overall operating results since it became
the dedicated New Jersey property/casualty carrier for Allstate. In
addition, Allstate New Jersey’s operating performance has generally
benefited from its ability to quickly react to changing market
conditions. Furthermore, private passenger automobile margins have
shown improvement due to recent rate activity, new business
acceptance criteria and renewal book actions. The group also has
taken steps to improve its homeowners’ business, including rate
increases, targeted customer/property inspections and a reduction
in mono-line homeowners’ exposure. Additionally, the ratings
acknowledge the operational and financial benefits Allstate New
Jersey receives as affiliates of Allstate Insurance Company,
which is a market leader in the U.S. insurance industry.
Allstate New Jersey’s positive rating factors are somewhat
offset by its geographic concentration within one state, which
exposes its capitalization and earnings to weather-related losses,
competitive pressures and regulatory mandates. This exposure has
been evident in recent years as its homeowners’ line of business
was adversely impacted by net catastrophe losses totaling
approximately $70 million in 2011 and $40 million in 2010, with an
overall combined ratio impact of approximately nine points and six
points, respectively. However, to reduce surplus volatility,
Allstate New Jersey has not paid dividends since 2007 and maintains
a conservative investment portfolio.
While the outlook is stable, the ratings/outlook for the group
could be downgraded if underwriting performance falls materially
short of A.M. Best’s expectations.
The FSR of A- (Excellent) and ICRs of “a-” have been affirmed
for Allstate New Jersey Insurance Group and its following
members:
- 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. Key
criteria utilized include: “Risk Management and the Rating Process
for Insurance Companies”; “Understanding BCAR for Property/Casualty
Insurers”; “Catastrophe Analysis in A.M. Best Ratings”; and “Rating
Members of Insurance Groups.” Best’s Credit Rating Methodology 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 © 2012 by A.M. Best Company,
Inc. ALL RIGHTS RESERVED.
Allstate (NYSE:ALL)
Historical Stock Chart
From Jun 2024 to Jul 2024
Allstate (NYSE:ALL)
Historical Stock Chart
From Jul 2023 to Jul 2024