A.M. Best Affirms Credit Ratings of First Colonial Insurance Company
OLDWICK, N.J. –(BUSINESS WIRE)
A.M. Best has affirmed the Financial Strength Rating of A (Excellent) and the Long-Term Issuer Credit Rating of “a” of First Colonial Insurance Company (First Colonial). The outlook of these Credit Ratings (ratings) is stable. The company is domiciled in Jacksonville, FL.
The ratings reflect First Colonial’s balance sheet strength, which A.M. Best categorizes as very strong, as well as its weak operating performance, neutral business profile and appropriate enterprise risk management.
The ratings recognize the company’s volatile and unprofitable underwriting performance over the past three years, which is highly influenced by a host of economic factors, including auto sales and loans. In recent years, First Colonial’s loss ratio has trended upward due to elevated losses associated with its Guaranteed Auto Protection (GAP) product. In an effort to improve the GAP loss experience, management has implemented a host of mitigation initiatives, which include rate increases, enhancements to its pricing segmentation and various other risk management actions.In addition, management is focusing its business mix to more profitable products in the vehicle services and ancillary automobile spaces.
The ratings continue to reflect the company’s very strong risk-adjusted capitalization. The ratings also benefit from the explicit and implicit support provided by The Allstate Corporation (Allcorp), its ultimate parent. As a subsidiary of Allcorp, First Colonial benefits from its expansive market presence and brand-name recognition.
This press release relates to Credit Ratings that have been published on A.M. 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 A.M. 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 A.M. Best press releases, please view Guide for Media – Proper Use of Best’s Credit Ratings and A.M. Best Rating Action Press Releases.
A.M. Best is a global rating agency and information provider with a unique focus on the insurance industry. Visit www.ambest.com for more information.
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