A.M. Best Removes From Under Review with Developing Implications & Affirms Credit Ratings of Pacific Compensation Insurance C...
January 17 2018 - 12:21PM
Business Wire
A.M. Best has removed from under review with developing
implications and affirmed the Financial Strength Rating (FSR) of A-
(Excellent) and the Long-Term Issuer Credit Rating (Long-Term ICR)
of “a-” of Pacific Compensation Insurance Company
(PacificComp) (Thousand Oaks, CA). The outlook assigned to these
Credit Ratings (ratings) is stable. Concurrently, A.M. Best has
affirmed the FSR of A- (Excellent) and the Long-Term ICR of “a-” of
the members of CopperPoint Mutual Group
(CopperPoint). The outlook of these ratings is stable. (See
below for a detailed list.)
The rating actions follow confirmation that CopperPoint
Mutual Insurance Company (CopperPoint Mutual) (Phoenix, AZ),
the lead member in CopperPoint, has acquired Pacific Compensation
Corporation (PCC) and its wholly owned subsidiary PacificComp from
Alleghany Insurance Holdings, LLC, a subsidiary of Alleghany
Corporation (Alleghany) [NYSE:Y].
The ratings reflect PacificComp’s balance sheet strength, which
A.M. Best categorizes as strongest, as well as its marginal
operating performance, limited business profile and appropriate
enterprise risk management (ERM).
The ratings also reflect the significant explicit support
provided by CopperPoint Mutual in terms of capital contributions
and reinsurance protection. In addition, A.M. Best believes
CopperPoint remains committed to PacificComp, which provides the
group with geographic premium diversification and broader
distribution channels.
PacificComp maintains the strongest level risk-adjusted
capitalization as measured by Best's Capital Adequacy Ratio (BCAR)
with scores at the 99.6% level. Risk-adjusted capitalization
benefits from the protection afforded through an adverse
development cover and keep well agreement for prior year reserves,
as well as the $100 million capital contribution received from
CopperPoint Mutual post-transaction close. Improved underwriting
results in recent years reflect ongoing management initiatives
implemented to restore underwriting profitability. However, pre-tax
operating earnings trail the workers’ compensation industry
composite by a wide margin over the recent five-year period given
the weak performance in earlier years.
The ratings of CopperPoint reflect its balance sheet strength,
which A.M. Best categorizes as strongest, as well as its adequate
operating performance, limited business profile and appropriate
ERM.
CopperPoint maintains the strongest level risk-adjusted
capitalization as measured by Best's Capital Adequacy Ratio (BCAR)
with scores at the 99.6% level. Strong pre-tax operating earnings
have outperformed the workers’ compensation industry composite by a
wide margin over the recent five-year period, with operating
earnings driven by growth in the level of net investment income,
which has more than offset reported underwriting losses.
The FSR of A- (Excellent) and the Long-Term ICRs of “a-” have
been affirmed with a stable outlook for the following members of
the CopperPoint Mutual Group:
- CopperPoint Mutual Insurance
Company
- CopperPoint American Insurance
Company
- CopperPoint Casualty Insurance
Company
- CopperPoint General Insurance
Company
- CopperPoint Indemnity Insurance
Company
- CopperPoint National Insurance
Company
- CopperPoint Premier Insurance
Company
- CopperPoint Western Insurance
Company
- MountainPoint Insurance
Company
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. For information on the proper media use of Best’s
Credit Ratings and A.M. Best press releases, please view
Guide for Media - Proper Use of Best’s Credit Ratings and A.M.
Best Rating Action Press Releases.
A.M. Best is the world’s oldest and most authoritative
insurance rating and information source. For more information,
visit www.ambest.com.
Copyright © 2018 by A.M. Best Rating
Services, Inc. and/or its affiliates. ALL RIGHTS RESERVED.
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version on businesswire.com: http://www.businesswire.com/news/home/20180117006150/en/
A.M. BestGordon McLean, +1-908-439-2200, ext.
5304Senior Financial
Analystgordon.mclean@ambest.comorJacqalene Lentz,
CPA, +1-908-439-2200, ext.
5762Directorjacqalene.lentz@ambest.comorChristopher
Sharkey, +1-908-439-2200, ext. 5159Manager, Public
Relationschristopher.sharkey@ambest.comorJim Peavy,
+1-908-439-2200, ext. 5644Director, Public
Relationsjames.peavy@ambest.com
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