A.M. Best has affirmed the financial strength rating of A (Excellent) and the long-term issuer credit rating of “a” of The American Road Insurance Company (TARIC).
The outlook of these credit ratings (ratings) is stable.
A.M. Best categorises TARIC’s balance sheet strength as strongest, as well as its adequate operating performance, neutral business profile and appropriate enterprise risk management.
ARIC is part of an insurance holding company system wholly owned by Ford Motor Credit Company (Ford Credit), which in turn is an indirect, wholly-owned subsidiary of Ford Motor Company (Ford).
According to A.M. Best, TARIC operates more like a captive insurance company for the Ford enterprise and provides a variety of coverages directly to Ford or Ford Credit, primarily automobile wholesale, collateral protection, inland marine, extended service business and commercial auto liability.
The rating company suggested that TARIC is vulnerable to macroeconomic and market conditions that potentially could have a detrimental impact on Ford’s ability to sell automobiles and generate premium for TARIC.
However, A.M. Best explained that the efficiencies gained by geographic diversification and immediate access to business as a strength for TARIC.
A.M. Best noted that significant deterioration in operating performance or risk-adjusted capitalisation may result in downward movement in the ratings and/or outlooks. Additionally, negative rating action also may occur if Ford’s credit profile deteriorates.
