AM Best has revised the outlook to positive from stable for the Long-Term Issuer Rating (Long-Term ICR) and affirmed the Financial Strength Rating (FSR) of B++ (Good) and a Long-Term ICR of “bbb” of Genesee Patrons Cooperative Insurance Company (Genesee) (Batavia, NY). The outlook of the FSR is stable.
The Credit Ratings (ratings) reflect Genesee’s balance sheet strength, which AM Best categorizes as strong, as well as its adequate operating performance, limited business profile and appropriate enterprise risk management.
The revised Long-Term ICR outlook to positive reflects sustained improvement to Genesee’s balance sheet strength, reflective of the strongest level of risk-adjusted capitalization, as measured by Best's Capital Adequacy Ratio (BCAR), and organic surplus growth over the past five years. Additionally, the company’s strong balance sheet strength reflects the overall solid liquidity measures that are enhanced by positive underwriting and operating cash flows, and its stable loss reserving trends as the company generally reported favorable development on most calendar and accident years. However, partially offsetting the positive factors is the company’s elevated equity position in the investment portfolio that generates high common stock leverage, which leaves surplus susceptible to stock market volatility. Furthermore, Genesee has limited financial flexibility and scale of operations. The company’s business profile is limited due to the product offerings as a single-state property insurer and geographic concentration in New York.
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