AM Best has upgraded the Financial Strength Rating (FSR) to A (Excellent) from A- (Excellent) and the Long-Term Issuer Credit Ratings (Long-Term ICR) to “a” from “a-” of Auto Club Insurance Association and its wholly owned subsidiaries, Auto Club Group Insurance Company, MemberSelect Insurance Company, Auto Club Property-Casualty Insurance Company, Meemic Insurance Company and Fremont Insurance Company. The outlook of these Credit Ratings (ratings) has been revised to stable from positive. Concurrently, AM Best has upgraded the FSR to A (Excellent) from A- (Excellent) and the Long-Term ICR to “a” from “a-” of The Members Insurance Company (TMIC) (Charlotte, NC). At the same time, AM Best has upgraded the FSR to A (Excellent) from B++ (Good) and the Long-Term ICR to “a” from “bbb” of Universal Insurance Company (NC) (UIC) (Winston-Salem, NC). The outlook of these ratings is stable. All companies are collectively referred to as Auto Club Group (ACG) and domiciled in Dearborn, MI, except where specified.
The ratings reflect ACG’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).
The rating upgrades reflect ACG’s improved operating performance, which resulted from implementing a number of initiatives designed to reduce underwriting volatility and improve rate adequacy. Underwriting performance has benefited from favorable loss reserve development and compares well with the composite and peer averages. ACG has maintained high policyholder retention levels despite strong competition due to its commitment to AAA members.
The very strong balance sheet assessment reflects ACG’s consolidated risk-adjusted capitalization, which is projected to remain at the strongest level over the near term, as measured by Best’s Capital Adequacy Ratio (BCAR). ACG’s business profile is neutral, as the group’s focused geographic concentration is mitigated partially by the proven ability to effectively operate within its territories by capitalizing on enhanced data analytics and pricing programs. Furthermore, the ERM program is appropriate for the risk profile of the organization.
The rating upgrades of TMIC and UIC reflect their additions to the group’s new intercompany reinsurance arrangement, and strategic importance to ACG. These companies write private passenger automobile and homeowners business in North Carolina and South Carolina.
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 London, Amsterdam, Dubai, Hong Kong, Singapore and Mexico City. For more information, visit www.ambest.com.
Copyright © 2021 by A.M. Best Rating Services, Inc. and/or its affiliates. ALL RIGHTS RESERVED.
Senior Financial Analyst
+1 908 439 2200, ext. 5034