AM Best Affirms Credit Ratings of Conifer Holdings, Inc. and Its Subsidiaries

AM Best has affirmed the Financial Strength Rating (FSR) of B++ (Good) and the Long-Term Issuer Credit Rating (Long-Term ICR) of “bbb” of Conifer Insurance Company (Conifer); the FSR of B+ (Good) and the Long-Term ICR of “bbb-” of Conifer’s affiliate, White Pine Insurance Company (White Pine); and the Long-Term ICR of “bb” of its parent holding company, Conifer Holdings, Inc. (CHI) [NASDAQ:CNFR]. All companies are domiciled in Birmingham, MI. The outlook of Conifer’s and CHI’s Credit Ratings (ratings) is negative. The outlook of White Pine’s ratings is stable.

The ratings reflect Conifer’s balance sheet strength, which AM Best categorizes as strong, as well as its marginal operating performance, limited business profile and appropriate enterprise risk management (ERM). The ratings reflect White Pine’s balance sheet strength, which AM Best categorizes as adequate, as well as its marginal operating performance, limited business profile and appropriate ERM.

The rating affirmations reflect AM Best’s view that the companies continue to make progress in returning to sustainable profitability, as management refocuses its insurance operations toward the companies' niche commercial specialty lines of business. Prospectively, AM Best expects underwriting results to improve in the near to medium term, as the companies gain economies of scale in their specialty lines and grow into CHI’s infrastructure. The companies have a legacy track record of success in its niche commercial specialty lines, including liability for restaurant, bars and taverns, as well as quick service restaurants and security guards.

Remedial actions executed late in 2017 have bolstered risk-adjusted capitalization directly through capital contributions into the two companies and augmented reserves through execution of a significant adverse development cover (ADC) to address adverse development after organic reserve strengthening. Conifer and White Pine have experienced further adverse development through the third quarter of 2018 but appears to have sufficient capacity remaining under the ADC to absorb slowing adverse development in its covered lines. Management also has significantly reduced catastrophe loss exposure by rapidly and efficiently exiting its troubled Florida homeowners line and other wind-exposed business.

Each company’s ability to generate profits to help support organic capital growth is a very important issue that AM Best will monitor over the near term. CHI’s ratings reflect standard notching from its lead insurance subsidiary, Conifer, and the outlook reflects the linkage of CHI’s rating to that of Conifer. CHI has been traded on the NASDAQ Global Market since August 2015. CHI’s leverage and coverage ratios are supportive of its ratings. Its status as a publicly traded company offers potential financial flexibility for the enterprise with access to public debt and equity markets.

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 Understanding 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 rating agency and information provider with a unique focus on the insurance industry. Visit www.ambest.com for more information.

Copyright © 2019 by A.M. Best Rating Services, Inc. and/or its affiliates. ALL RIGHTS RESERVED.

Contacts:

Dan Teclaw
Senior Financial Analyst
+1 908 439 2200, ext. 5394
dan.teclaw@ambest.com

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