A.M. Best Upgrades Credit Ratings of Members of PURE Group of Insurance Companies
OLDWICK, N.J.--(BUSINESS WIRE)--Aug 30, 2018--A.M. Best has upgraded the Financial Strength Rating (FSR) to A (Excellent) from A- (Excellent) and the Long-Term Issuer Credit Ratings (Long-Term ICR) to “a” from “a-” for both members of the PURE Group of Insurance Companies (PURE): Privilege Underwriters Reciprocal Exchange and PURE Insurance Company. The outlook of these Credit Ratings (ratings) has been revised to stable from positive. Both companies are domiciled in Fort Lauderdale, FL.
The ratings reflect PURE’s balance sheet strength, which A.M. Best categorizes as very strong, as well as its adequate operating performance, neutral business profile and appropriate enterprise risk management.
PURE’s balance sheet reflects the group’s improved risk-adjusted capitalization, predominantly as a result of strong growth in policyholder surplus, along with enhancements to the catastrophe reinsurance. Surplus growth in 2018 was significantly impacted by an accounting change approved by the Florida regulator, which allowed for deferred acquisition costs to be reduced by a portion of unearned attorney-in-fact fees, due to their related party status. Additional financial flexibility is provided through PURE’s parent company and outside sources, as well as from subscriber surplus contributions that are anticipated to continue as new business is generated and retained over several years. Partially offsetting these positive factors are the group’s increased reinsurance cessions and significant growth in direct written premiums.
PURE has also reported improved operating performance in recent years largely due to net loss ratios that compare favorably with industry averages. The group’s elevated expense ratio is largely a function of the attorney-in-fact fees paid to affiliate PURE Risk Management, LLC. However, the year to date expense ratio also reflects a one-time impact of the large cession of unearned premium under a newly implemented 60% whole account quota share contract effective June 1, 2018. While there has been some weather-driven volatility in results, the core book of business has performed well, primarily due to underwriting discipline and rate actions.
The stable outlooks reflect A.M. Best’s expectation that the group’s rating fundamentals will remain unchanged over the short to medium term.
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 web page. For additional information regarding the use and limitations of Credit Rating opinions, please view . For information on the proper media use of Best’s Credit Ratings and A.M. Best press releases, please view .
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CONTACT: A.M. Best
Jonathan Harris, CFA, FRM, CPCU, +1 908 439 2200, ext. 5771
Senior Financial Analyst
Jacqalene Lentz, CPA, +1 908 439 2200, ext. 5762
Christopher Sharkey, +1 908 439 2200, ext. 5159
Manager, Public Relations
Jim Peavy, +1 908 439 2200, ext. 5644
Director, Public Relations
KEYWORD: UNITED STATES EUROPE NORTH AMERICA NEW JERSEY
INDUSTRY KEYWORD: PROFESSIONAL SERVICES INSURANCE
SOURCE: A.M. Best
Copyright Business Wire 2018.
PUB: 08/30/2018 02:42 PM/DISC: 08/30/2018 02:42 PM