AM Best has affirmed the Financial Strength Rating of B+ (Good) and the long-term issuer credit rating of “bbb-” (Good) of Conifer Insurance Company and White Pine Insurance, subsidiaries of Conifer Holdings.
Domiciled in Michigan, Conifer Holding is a property and casualty insurance holding company. Collectively these companies, which are all domiciled in the same location, are referred to as Conifer.
The outlook of these credit ratings is stable.
AM Best says the ratings reflect Conifer’s balance sheet strength, which it assesses as adequate, as well as its marginal operating performance, neutral business profile and marginal enterprise risk management.
The affirmations also show the challenges facing the group and management’s attempts to cull losses caused by the underperforming segments of the business.
The ratings and outlooks consider the strategic initiatives and corrective measures recently taken by management by way of retroactive reinsurance to help minimise the impact of future loss reserve development and its effect on the balance sheet.
The ratings also take into consideration the additional capital raised from the sale of its managing general agency, VSRM Insurance Agency.
In addition, in the fourth quarter of 2022, the group executed a significant loss portfolio transfer reinsurance agreement, which provided cover for US $20 million of adverse reserve development protection for accident years 2019 and prior.
Conifer’s operating performance is assessed as marginal, as underwriting and operating results remain well below expectations, says AM Best.
Although Conifer has dedicated its efforts toward refining its niche business segments, exiting problematic regions, pruning its underperforming business, and refining its pricing, these actions have not yet translated into meaningful improvement.
Its ERM capabilities remain marginal and the organisation has been plagued by substantial reserving issues and its inability to organically grow surplus since inception.
AM Best expects that Conifer’s business profile, with a continued focus on its expertise in niche lines, coupled with the aforementioned actions, should benefit underwriting and operating results prospectively.
