am the best has confirmed the Financial Strength Rating (FSR) of A- (Excellent) and the Long-Term Issuer Credit Rating (Long-Term ICR) of “a-” (Excellent).
At the same time, AM Best has confirmed the FSR of A- (excellent) and the long-term ICR of “a-” (excellent).
The ratings reflect Fortegra P/C Group’s balance sheet strength, which AM Best rates as very strong, reasonable operational performance, neutral business profile and reasonable Enterprise Risk Management (ERM).
Fortegra P/C Group’s balance sheet strength assessment is based on its strongest risk-adjusted capitalization as measured by Best’s capital adequacy ratio (BCAR), its prudent investment portfolio, solid liquidity metrics enhanced by positive underwriting and operating cash flows, and comprehensive reinsurance program. Partially offsetting these positive rating factors is the firm’s heavy reliance on third-party reinsurance for capacity provision, reflected in its high ceded underwriting leverage, mitigated somewhat by the use of collateral, and its modest loss reserve volatility. The P/C Group’s capital and surplus have demonstrated strong long-term growth through retained earnings, partially offset by modest dividends paid to the parent company. In 2021, additional capital was injected into the entire group, resulting in a significant increase in the total capital of the P/C Group.
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Fortegra Indemnity’s ratings reflect its balance sheet strength, which AM Best considers reasonable, as well as its reasonable operating performance, limited business profile and reasonable ERM. These ratings also reflect Fortegra Indemnity’s strategic role within the consolidated organization as a captive reinsurer, assuming almost all of Fortegra Indemnity’s credit real estate risk
Fortegra Indemnity’s balance sheet strength assessment is based on an appropriate level of risk-adjusted capitalization, as measured by BCAR, to support its business risks, but notes capital increases throughout 2021 through organic income and capital contributions. Fortegra Indemnity’s balance sheet posted growth in 2021 after two years of contraction. The company has made sporadic dividend payments in the past, but hasn’t made any since 2019. Total reserves were up in 2021 and relatively flat in previous years. The reserve profile is a credit characteristic and has relatively short duration and is less dependent on long-tail risk factors.
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Source: AM Best