OLDWICK, N.J.–(BUSINESS WIRE)–AM Best has revised the outlooks to positive from stable and
affirmed the Financial Strength Rating of A- (Excellent) and the
Long-Term Issuer Credit Ratings of “a-” of Security Mutual Insurance
Company (Security Mutual) and Pittstown Cooperative Fire Ins. Co.
(Pittstown) (collectively referred to as Security Mutual Group). Both
companies are domiciled in Ithaca, NY.
The ratings reflect Security Mutual Group’s balance sheet strength,
which AM Best categorizes as very strong, as well as its adequate
operating performance, limited business profile and appropriate
enterprise risk management (ERM).
The outlook revisions to positive reflect AM Best’s expectation of
sustained underwriting and operating performance that outperforms the
group’s peers while maintaining very strong balance sheet strength,
despite moderate volatility due to weather-related events, fire losses
and competitive market conditions.
The balance sheet strength is supported by the strongest level of
risk-adjusted capitalization, as measured by Best’s Capital Adequacy
Ratio (BCAR), favorable underwriting leverage and strong liquidity, as
reflected by the group’s high quality investment portfolio with
above-average liquidity measures. A comprehensive reinsurance program
and consistently favorable loss reserve development trends, partially
offset by limited financial flexibility as mutual insurers, further
support the balance sheet.
The group’s operating performance benefits from consistently profitable
underwriting results attributed to management’s strict underwriting and
pricing discipline, as well as its rigorous reinspection efforts and
coastal mitigation strategies. Despite operating performance that has
outperformed the personal property composite over the past several
years, the group maintains an expense disadvantage due to above-average
commissions relative to the composite. The business profile is limited
based on the group’s product line and geographic concentration, with
business written solely in New York. Security Mutual Group writes
primarily homeowners insurance, excluding auto and small commercial
risks, included mostly under the commercial multiperil line of business.
Prospectively, the group expects to maintain profitable growth by
offering an array of products to specific target market segments
throughout New York. AM Best considers the ERM framework and risk
management capabilities to be appropriate and well-aligned with the risk
profile of the organization. Despite the group’s comprehensive
reinsurance program, which helps to mitigate weather-related losses, it
maintains modest tail risk exposure, as reflected by the BCAR score at
the 99.8% value-at-risk confidence level.
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.
Contacts
Maurice Thomas
Senior Financial Analyst
+1
908 439 2200, ext. 5794
[email protected]
Brian O’Larte
Director
+1 908 439 2200, ext.
5138
brian.o’[email protected]
Christopher Sharkey
Manager, Public Relations
+1
908 439 2200, ext. 5159
[email protected]
Jim Peavy
Director, Public Relations
+1 908
439 2200, ext. 5644
[email protected]
