AM Best Improves Credit Ratings for Agency Insurance Company of Maryland, Inc.
OLDWICK, New Jersey – (COMMERCIAL THREAD) –AM Best raised the financial strength rating to A- (excellent) from B ++ (good) and the long-term credit rating of the issuer to “a-” (excellent) from “bbb +” (good) from Agency Insurance Company of Maryland, Inc. (AIC) (Hanover, MD). The outlook for credit ratings has been revised from positive to stable.
The ratings reflect the strength of AIC’s balance sheet, which AM Best considers to be very strong, as well as its strong operational performance, limited business profile and appropriate management of business risks.
The upgrading of ratings is the result of a favorable development in the strength of AIC’s balance sheet. This is due to the continuous improvement in the level of the company’s insured surpluses and its risk-adjusted capitalization. AIC’s overall risk-adjusted capitalization, as measured by Best’s capital adequacy ratio (BCAR), is valued at the highest level. The strength of the balance sheet is also supported by favorable reserve developments and strong liquidity measures. AIC’s strong operating performance contributed to the excess growth of the company. In addition, premium growth has slowed in recent years and surplus appreciation has outpaced surplus growth over the past three years. This has helped net and gross leverage ratios fall over the past five-year period to a more favorable position relative to AM Best’s non-standard automotive composite.
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