AM Best Confirms Damage Protection Insurance Company’s Credit Ratings
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OLDWICK, NJ – (BUSINESS WIRE) –
AM best confirmed the financial strength rating of A (Excellent) and the issuer’s long-term credit rating of “a” (Excellent) of Protective Property & Casualty Insurance Company (Protective P&C) (St. Louis, MO). The outlook for these credit ratings (ratings) is stable.
The ratings reflect the strength of Protective P & C’s balance sheet, which AM Best considers very strong, as well as its adequate operational performance, neutral business profile and appropriate enterprise risk management (ERM). The ratings also reflect the increased rating of its parent company, Protective Life Insurance Company (Protective Life).
AM Best’s balance sheet strength assessment is based on the highest level of risk-adjusted capitalization as measured by Best’s capital adequacy ratio (BCAR), good asset quality, adequate balance sheet liquidity and annual growth in excess annual dividends to the parent. The strength of the balance sheet is somewhat undermined by Protective P & C’s heavy reliance on reinsurance arrangements owned by unrated dealers. AM Best considers the company’s operational performance to be adequate based on its consistent track record of profitability, with performance metrics and underwriting ratios that remain comparable to its composite group of guarantee insurers.
Protective P&C specializes in vehicle service contract coverage and guaranteed asset protection products for automobiles, boats, powersports vehicles and recreational vehicles, sold primarily through franchised dealers and independent agents. The neutral business profile reflects the concentration of the company’s underwriting risk in the highly competitive automotive warranty market, offset by geographic diversification. The company’s ERM is tailored to its risk profile and is integrated with that of its parent company, Protective Life.
Protective P&C was awarded a rating upgrade due to the implicit support of its higher rated parent company, its integration into the organization and its support for the organization’s asset protection strategy.
This press release relates to credit ratings published on the AM Best website. For all rating information relating to the publication and relevant disclosures, including details of the office responsible for issuing each of the individual ratings referenced in this release, please see AM Best’s Recent rating activity Web page. For more information on the use and limits of credit rating opinions, please see Best Credit Ratings Guide. For more information on the appropriate media use of Best’s credit ratings and AM Best press releases, please see Media Guide – Appropriate Use of Best Credit Ratings and AM Best Rating Stock Press Releases.
AM Best is a global credit rating agency, news publisher, and data analytics provider specializing in the insurance industry. Based in the United States, the company operates in more than 100 countries with regional offices in London, Amsterdam, Dubai, Hong Kong, Singapore and Mexico City. For more information visit www.ambest.com.
Copyright © 2021 by AM Best Rating Services, Inc. and / or its affiliates. ALL RIGHTS RESERVED.
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Source: AM Best