OLDWICK, N.J.–(BUSINESS WIRE)–A.M. Best Co. has upgraded the issuer credit ratings (ICR) to “bbb+” from “bbb” and affirmed the financial strength rating (FSR) of B++ (Good) of Dakota Group (Dakota) and its members. Dakota is comprised of Dakota Truck Underwriters and First Dakota Indemnity Company. The outlook for the ICR is positive, while the outlook for the FSR has been revised to positive from stable. All companies are domiciled in Sioux Falls, SD.
The rating actions reflect Dakota’s strong capitalization, historically positive operating performance and specialized market presence as a niche workers’ compensation writer in the upper Midwestern states. Dakota’s relatively strong after-tax returns and moderating premium volumes have led to improved underwriting leverage, which is reflected in a stronger level of risk-adjusted capitalization.
Somewhat offsetting these positive rating factors is Dakota’s liquidity ratios that are below the workers’ compensation industry composite norms, and the company’s relatively high rate of premium balance receivables when compared to admitted assets and surplus. Despite these concerns, the outlook reflects A.M. Best’s expectation that capitalization as well as operating performance will continue to remain supportive of Dakota’s operations.
Source: BusinessWire