OLDWICK, N.J.–(BUSINESS WIRE)–A.M. Best Co. has revised the outlook to positive from stable and affirmed the financial strength rating of B+ (Good) and issuer credit rating of “bbb-” of Springfield Insurance Company (Springfield) (Covina, CA).
These rating actions reflect Springfield’s sustained operating earnings in recent years, improved capitalization, conservative underwriting strategy, as well as management’s expertise and knowledge of the grocery business. Springfield’s underwriting results and capitalization have benefited from enhanced loss control focus and the underwriting initiatives implemented in recent years, such as reducing underwriting credits and the non-renewal of underperforming accounts.
Partially offsetting these positive rating factors is Springfield’s exposure to geographic and product line concentration risk, as the company garners the majority of its business from one state with product lines focused on one industry. As a result, Springfield is exposed to changes in the legislative and judicial environment as well as competitive pressures. A.M. Best believes that an experienced management team, along with continued underwriting discipline and controlled diversification into other casualty lines in neighboring states will continue to improve the future operating performance and surplus of the company.
Factors that could lead to rating upgrades include continued strong operating performance that is better than the workers’ compensation composite and stable reserve development. However, Springfield’s outlook could be lowered if its operating performance falls markedly short of A.M. Best’s expectations.