AM Best Assigns Credit Ratings to The Gray Indemnity Company; Affirms Credit Ratings of The Gray Insurance Company and Affiliate

AM Best has assigned a Financial Strength Rating (FSR) of A- (Excellent) and a Long-Term Issuer Credit Rating (Long-Term ICR) of “a-” to The Gray Indemnity Company (GID). The outlook assigned to these Credit Ratings (rating) is stable. Concurrently, AM Best has affirmed the FSR of A- (Excellent) and the Long-Term ICRs of “a-” of The Gray Insurance Company (GIC) and Gray Surplus Lines Insurance Company (GSLIC). The outlook of these ratings is stable. These companies collectively are known as Gray Insurance Group (the group).

In addition, AM Best has affirmed the FSR of A- (Excellent) and the Long-Term ICR of “a-” of The Gray Casualty & Surety Company (GCSC), a wholly owned subsidiary of GIC. The outlook of these ratings is stable. All companies are headquartered in Metairie, LA.

The ratings reflect the group’s balance sheet strength, which AM Best categorizes as very strong, as well as its adequate operating performance, neutral business profile and appropriate enterprise risk management (ERM).

GID is a wholly owned subsidiary of GIC, and plans to write loss sensitive workers’ compensation, commercial-automobile liability, commercial-general liability and excess liability coverages. The ratings assigned to GID reflect the existence of a 100% intercompany quota share reinsurance agreement with GIC, effective Dec. 1, 2020.

The ratings of the group are reflective of its strongest level of risk-adjusted capitalization, as measured by Best’s Capital Adequacy Ratio (BCAR), historically profitable operating results, and focused loss control services for its heavy construction risks and energy-related operations in its established niche market. Partially offsetting these positive rating factors are the group’s moderate annual stockholder dividend payments, which have somewhat constrained capital appreciation and the operating loss in 2019 associated with loss reserve strengthening on prior accident years primarily in the commercial auto line.

The ratings of GCSC reflect its balance sheet strength, which AM Best categorizes as very strong, as well as its adequate operating performance, limited business profile and appropriate ERM. The ratings of GCSC further reflect its strongest BCAR scores and low underwriting leverage metrics. Operating performance at GCSC has improved generally over the recent five-year period, driven by sound underwriting and loss reserving practices.

This press release relates to Credit Ratings that have been published on AM Best’s website. For all rating information relating to the release and pertinent disclosures, including details of the office responsible for issuing each of the individual ratings referenced in this release, please see AM Best’s Recent Rating Activity web page. For additional information regarding the use and limitations of Credit Rating opinions, please view Guide to Best’s Credit Ratings. For information on the proper media use of Best’s Credit Ratings and AM Best press releases, please view Guide for Media - Proper Use of Best’s Credit Ratings and AM Best Rating Action Press Releases.

AM Best is a global credit rating agency, news publisher and data analytics provider specializing in the insurance industry. Headquartered in the United States, the company does business in over 100 countries with regional offices in New York, London, Amsterdam, Dubai, Hong Kong, Singapore and Mexico City. For more information, visit www.ambest.com.

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