Oldwick, NJ – A.M. Best has revised the outlooks to positive from stable and affirmed the Financial Strength Rating of B++ (Good) and the Long-Term Issuer Credit Ratings of “bbb+” of RetailFirst Insurance Company and BusinessFirst Insurance Company, collectively referred to as RetailFirst Insurance Group (RetailFirst). All companies are domiciled in Lakeland, FL.
The ratings reflect RetailFirst’s balance sheet strength, which A.M. Best categorizes as very strong, as well as its marginal operating performance, limited business profile, and appropriate enterprise risk management. The positive outlook reflects the company’s improved operating performance and ability to weather a challenging Florida workers’ compensation market.
The ratings are supported by RetailFirst’s very strong capitalization, solid operating profitability measures and management’s disciplined operating philosophy. The ratings further acknowledge the group’s improving underwriting performance in recent years despite regulatory and competitive market conditions in Florida. In addition, the ratings recognize RetailFirst’s historically prudent loss reserving standards, which has resulted in favorable loss reserve development on prior accident years and management’s strategic business plans and estimates that project near-term earnings and capital accumulation.
These positive rating factors are somewhat offset by the challenging market conditions in the workers’ compensation line of business and the group’s concentrated business profile, operating as a monoline insurer with significant concentration in Florida, which exposes the group to additional competitive pressures and regulatory and judicial issues.
Furthermore, A.M. Best recognizes the group’s long-standing relationship with Summit Consulting, Inc., which has been the third-party administrator since RetailFirst Insurance Company was formed as a fund in 1979. The two organizations continue to sustain a strong working relationship with a solid presence in Florida.
Positive credit rating actions could occur if there is improvement in operating earnings and resulting return on revenue measures are sustained over a period of time. Conversely, negative rating actions could occur if there is a significant deterioration in operating results over the long term.
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