Oldwick, NJ -(BusinessWire)- A.M. Best has assigned a financial strength rating of A+ (Superior) and an issuer credit rating of “aa-” to Safety Specialty Insurance Company (Safety Specialty) (St. Louis, MO). The outlook assigned to each rating is stable.
The ratings reflect the company’s role as a subsidiary of Safety National Casualty Corporation (Safety National), which is to target general liability and professional liability business from existing excess workers’ compensation and large deductible workers’ compensation policyholders of Safety National in the public entity workplace. Factors supporting this relationship include alignment of strategy, common ownership and management and explicit support provided by Safety National in the form of capital contributions and a significant quota share reinsurance treaty. Safety Specialty has a conservative business plan in which risk-adjusted capitalization is expected to be strong from significant initial capital contributions relative to projected premiums and associated liabilities. In addition, A.M. Best believes the company’s operating earnings forecast for its initial development period is conservative.
Future negative rating action could occur should there be a significant decline in levels of risk-adjusted capitalization or if actual operating earnings fall well below A.M. Best’s expectations. Because of the depth of the relationship between Safety Specialty and Safety National, any change in the ratings of Safety National, either positive or negative, could also impact the ratings of the subsidiary.