AM Best Confirms Credit Ratings of The Fortegra Group, Inc.’s Insurance Subsidiaries – Insurance News Net | CarTailz

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). US-based operating subsidiaries of The Fortegra Group, Inc. (Fortegra) (headquartered in Jacksonville, FL). Fortegra is a wholly owned subsidiary of its publicly traded parent, Tiptree Inc. [NASDAQ: TIPT]. That US Fortegra’s Property/Casualty (P/C) subsidiaries include: Lyndon Southern Insurance Company (Wilmington, DE); insurance company of the south (Athens, GA); Response Indemnity Company of California (Redondo Beach, CA); Blue Ridge Indemnity Company (Wilmington, DE); and Fortegra Specialty Insurance Company (Fortegra specialty) (Scottsdale, Arizona). These companies are collectively referred to as Fortegra P/C group (the P/C Group). In addition, AM Best has certified the FSR of A- (excellent) and the long-term ICR of “a-” (excellent) of Fortegra’s Life/Health operating subsidiaries, including: Life of the Insurance Company South (Athens, GA); Bankers Life Insurance Company of Louisiana (Marksville, LA); and Southern Financial Life Insurance Company (Scottsville, Kentucky). These companies are collectively referred to as Life of the Group South (the life group). The outlook of these credit ratings (ratings) is Stable.

At the same time, AM Best has confirmed the FSR of A- (excellent) and the long-term ICR of “a-” (excellent). Fortegra Indemnity Insurance Company, LTD. (Fortegra Indemnity) (Turks and Caicos Islands). The outlook of these ratings is stable.

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.

The reviews of the life of Group South reflect its balance sheet strength, which AM Best rates as strong, reasonable operational performance, neutral business profile and reasonable ERM. The ratings also reflect the life insurance group’s strategic role within the consolidated organization as a provider of credit life, accident and health insurance products.

The life of Group South has maintained the strongest level of risk-adjusted capitalization as measured by BCAR. Growth in the life insurance group’s absolute capital level was supported by consistent profitability. The life insurance group itself has no debt, and while it has a conservative bond portfolio and a liquid investment profile, it has taken on greater investment risk in recent years. AM Best notes that the company maintains high reinsurance leverage as the life insurance group cedes more than half of its gross premiums. The majority of the transferred business is retained US-domiciled and offshore subsidiaries. In addition, the life insurance group maintains a number of reinsurance arrangements with captive reinsurance companies, which primarily serve as a vehicle for profit and risk sharing with the life insurance group’s distribution partners.

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 P/C groupwithout external reinsurance, and more recently in connection with a quota agreement with its foreign subsidiary.

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.

This press release relates to ratings published on AM Best’s website. All ratings information relating to the press release and relevant disclosures, including details of the issuing authority for each rating referenced in this press release, can be found at AM Best Last review activity site. For more information on the use and limitations of rating opinions, see Best Credit Ratings Guide. Information on the proper use of Best’s credit ratings, Best’s performance reviews, Best’s preliminary credit rating and AM Best’s press releases can be found here Guide to Proper Use of Best’s Ratings & Assessments.

AM Best is a global rating agency, news publisher and data analytics provider specializing in the insurance industry. headquarters in The United Statesthe company is in over 100 Countries with regional offices in London, Amsterdam, Dubai, Hong Kong, Singapore and Mexico City. For more information visit www.ambest.com.

Copyright © 2022 by AM Best Rating Services, Inc. and/or its affiliates. ALL RIGHTS RESERVED.

src=”https://cts.businesswire.com/ct/CT?id=bwnewssty=20221117006053r1sid=acqr8distro=nxlang=en” style=”width:0;height:0″ />

Sergio Musacchio
Senior Financial Analyst

+1 908.439.2200, extension 5032

[email protected]

Christopher Sharkey
manager, public relations

+1 908.439.2200, extension 5159

[email protected]

Edin Imsirovic
Deputy Director

+1 908.439.2200, extension 5740

[email protected]

Al Slawin
communication specialist

+1 908.439.2200, extension 5098

[email protected]

Source: AM Best

Leave a Comment