OLDWICK, N.J.–(BUSINESS WIRE)–AM Best has affirmed the Financial Strength Rating of B++ (Good)
and the Long-Term Issuer Credit Rating (Long-Term ICR) of “bbb+” of
Illinois Casualty Company (ICC). Concurrently, AM Best has
affirmed the Long-Term ICR of “bb+” of ICC Holdings, Inc. (ICCH), the
publicly traded holding company that owns 100% of ICC. The outlook of
these Credit Ratings (ratings) is stable. Both companies are domiciled
in Rock Island, IL.
The ratings reflect ICC’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).
ICC’s balance sheet strength is assessed as very strong and reflects the
company’s strongest level of risk-adjusted capitalization, as measured
by Best’s Capital Adequacy Ratio (BCAR), its favorable underwriting
leverage measures compared with the commercial casualty composite
averages, and its conservative reserving practices. ICC also has access
to the capital markets through its publicly traded parent, ICCH. ICC
reported a slight decline in surplus at year-end 2018 because of
unrealized gains and an underwriting loss, but surplus has recovered
because of the rebound in the equity markets in 2019.
ICC’s operating performance remains adequate. The company’s five-year
average combined ratio compares favorably with the commercial casualty
composite average, but its five-year average operating ratio, pre-tax
return on revenue, and total return on equity lag the composite
averages. ICC has reported positive pre-tax operating and net income in
each of the past five years, but has reported underwriting losses in
each of the past two years due to increased weather-related activity,
with this trend continuing through first-quarter 2019.
Business profile is assessed as limited, primarily driven by its
concentration in several Midwestern states including Illinois,
Minnesota, Missouri and Iowa, and its niche in the food and beverage
industry. ICC has a longstanding history of serving its target markets
and is the exclusively endorsed insurer for several industry
associations. ICC has expanded since it demutualized, and it currently
writes business in 10 states.
ERM is appropriate for ICC’s risk profile as a public, specialty insurer
primarily operating in the Midwest. The company maintains a developed
ERM framework that focuses on the company’s most critical risks. It
maintains formalized risk appetite and tolerance statements, and
actively measures, monitors and manages each of its identified risks.
Additionally, ICC purchases significant reinsurance mitigating the risk
of tail events, as reflected by BCAR at the 99.8% VaR 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
Bob Skrabal, ACAS
Financial Analyst
+1 908
439 2200, ext. 5792
[email protected]
Joseph Burtone
Director
+1 908 439 2200, ext.
5125
[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]
