A.M. Best has affirmed the financial strength rating of A- (Excellent) and the long-term issuer credit ratings of “a-” of the US-based operating subsidiaries of Fortegra Financial Corporation.
Fortegra is a wholly owned subsidiary of publicly traded parent company, Tiptree.
The US property/casualty operating subsidiaries of Fortegra include Lyndon Southern Insurance Company, Insurance Company of the South, Response Indemnity Company of California and Blue Ridge Indemnity Company, which operate under an intercompany pooling agreement and are collectively referred to as Fortegra P&C Group.
The life/health operating subsidiaries include Life of the South Insurance Company, Bankers Life of Louisiana and Southern Financial Life Insurance Company, which are collectively referred to as the Life of the South Group.
Concurrently, AM Best has affirmed the financial strength rating of A- (Excellent) and the long-term issuer credit rating of “a-” of Fortegra Indemnity Insurance Company.
The outlook of these credit ratings is stable.
The ratings reflect Fortegra P&C Group’s balance sheet strength, which A.M. Best categorises as very strong, as well as its adequate operating performance, neutral business profile and appropriate enterprise risk management.
The group’s balance sheet is supported by the strongest level of risk-adjusted capitalisation, a conservative investment portfolio and strong reinsurance programme, according to A.M. Best.
The rating firm said that reinsurance leverage is elevated due to the utilisation of producer owned reinsurance companies, which provide risk and profit sharing between the company and its distributors, and its captive insurer Fortegra Indemnity.
However, A.M. Best noted that credit and loss risk are largely mitigated by the high collateralisation requirements held in trust accounts.
A.M. Best suggested that operating performance has been led by very strong premium growth in its core credit products and consistent underwriting profitability, while the business profile maintains good diversification by individual product, although the overall book is moderately concentrated in credit property risks.
The ratings Fortegra Indemnity reflect its balance sheet strength, which A.M. Best categorises as very strong, as well as its adequate operating performance, limited business profile and appropriate enterprise risk management. These ratings also reflect the financial support of its parent organisation, according to A.M. Best.
Fortegra Indemnity is a captive reinsurer that assumes almost all of the credit property exposure held by the Fortegra P&C Group, net of external reinsurance.
A.M. Best said the entity maintains the strongest level of risk-adjusted capitalisation and has reported consistent underwriting profitability in recent years.