AM Best confirms the credit ratings of Safety Insurance Group, Inc. and its principal subsidiaries; Assigns credit scores to Safety Northeast Insurance Company
OLDWICK, NJ – (BUSINESS WIRE) –AM Best confirmed the Financial Strength Rating (FSR) of A (Excellent) and the Issuer’s Long Term Credit Rating (Long Term ICR) of âa +â (Excellent) from Safety Insurance Company, Security indemnity insurance company and property and casualty insurance company. The outlook for these credit ratings (ratings) is stable. At the same time, AM Best assigned an FSR of A (Excellent) and a long-term ICR of âa +â (Excellent) to Safety Northeast Insurance Company (Safety Northeast). The outlook attributed to these ratings is stable. Collectively, along with Safety Northeast, these companies are referred to as Safety Group (Security). At the same time, AM Best confirmed the long-term ICR of âbbb +â (good) from Safety Insurance Group, Inc. (Delaware) [NASDAQ/GS: SAFT], parent company of Safety, listed on the stock exchange. The outlook for these ratings is stable. All businesses are headquartered in Boston, MA, unless otherwise specified.
The ratings reflect the strength of Safety’s balance sheet, which AM Best considers very strong, as well as its strong operational performance, neutral business profile and appropriate enterprise risk management (ERM).
The very strong security balance sheet is due to low underwriting leverage, sound liquidity measures and historically favorable trends in reserve development. In addition, Safety benefits from the financial flexibility offered by its publicly traded parent company, which has the ability to access financial markets. Safety’s strong operational performance is the result of consistently profitable technical results and solid investment income. Strong profitability has supported policyholder surplus growth and is a result of management’s ability to successfully manage the challenges of Massachusetts, where Safety does the majority of its business.
AM Best assesses Safety’s business profile as neutral due to its leading position in the market and the diversity of its product offerings, partially offset by its geographic concentration in Massachusetts, which exposes Safety to economic, regulatory and risk risks. above-average legislatures. AM Best considers Safety ERM to be appropriate for the size and scope of the company’s operations; however, Safety is exposed to significant catastrophe risk and has implemented strategies to reduce this exposure.
The ratings also reflect Safety Northeast’s addition to the group’s intercompany reinsurance pooling agreement. Safety Northeast is expected to start drafting risks for homeowners who meet more stringent guidelines in the fourth quarter of 2021.
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