OLDWICK, N.J.--(BUSINESS WIRE)--
A.M. Besthas affirmed the Financial Strength Rating (FSR) of A-
(Excellent) and the Long-Term Issuer Credit Ratings (Long-Term ICR) of
“a-” of the operating subsidiaries of Fortegra Financial Corporation
(Fortegra). Fortegra is a wholly owned subsidiary of Tiptree
Financial Inc. (NASDAQ:TIPT). The property/casualty operating
subsidiaries of Fortegra include Lyndon Southern Insurance Company
(Wilmington, DE), Insurance Company of the South (Athens, GA) and Response
Indemnity Company of California (Redondo Beach, CA), which operate
under an intercompany pooling agreement and are collectively referred to
as Fortegra P&C Group. The life/health operating subsidiaries
of Fortegra include Life of the South Insurance Company(Athens,
GA); Bankers Life of Louisiana(Marksville, LA) and Southern
Financial Life Insurance Company(Scottsville, KY), which are
collectively referred to as the Life of the South Group. The
outlook of these Credit Ratings (rating) remains stable.
The ratings reflect Fortegra P&C Group’s solid risk-adjusted
capitalization, historically profitable operating performance of their
core book of business and its niche distribution channels. Partially
offsetting these positive rating factors are the limited scope of the
group’s operations, considerable growth in direct writings over the
current five-year period and heavy reliance on third-party reinsurance,
as evidenced by the group’s elevated gross and ceded underwriting
leverage measures. However, the associated credit risk related to the
group’s reliance on third-party reinsurance recoverables is mitigated by
the credit quality of its rated reinsurers and collateralization of the
recoverables due to non-rated entities.
The ratings of the Life of the South Group acknowledge its sufficient
consolidated risk-adjusted capitalization. The ratings also recognize
the group’s positive net operating performance, derived primarily from
its core credit life and credit accident and health businesses, as well
as the positive trends in premium growth. Somewhat offsetting these
rating factors are the Life of the South Group’s limited business
profile, although the group continues to expand its product offerings
and distribution capabilities. A.M. Best believes the group may be
challenged to sustain and improve its net operating performance given
the challenges of the persistent low interest rate environment and the
expense strains expected from anticipated new business growth.
While the members of Fortegra are well-positioned at the current rating
level, negative rating action could occur if underwriting and operating
performance fall markedly short of A.M. Best’s expectations, if there is
a significant weakening of risk-adjusted capitalization, or if there is
deterioration in the quality of Fortegra’s consolidated balance sheet,
including, but not limited to, an increase in financial leverage or an
increase in the ratio of intangible assets to stockholders’ equity.
This press release relates to Credit Ratings that have been published
on A.M. 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 A.M. Best’s Recent
Rating Activity web page. For additional information
regarding the use and limitations of Credit Rating opinions, please view Understanding
Best’s Credit Ratings. For information on the proper media
use of Best’s Credit Ratings and A.M. Best press releases, please view Guide
for Media - Proper Use of Best’s Credit Ratings and A.M. Best Rating
Action Press Releases.
A.M. Best is the world’s oldest and most authoritative insurance
rating and information source. For more information, visit www.ambest.com.
Copyright © 2017 by A.M. Best Rating Services, Inc. and/or its
subsidiaries. ALL RIGHTS RESERVED.
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A.M. Best
Brian O’Larte, +1-908-439-2200, ext. 5138
Associate
Director – P\C
brian.o'larte@ambest.com
or
Peter
Kelley, +1-908-439-2200, ext. 5834
Senior Financial Analyst
–L\H
peter.kelly@ambest.com
or
Christopher
Sharkey, +1-908-439-2200, ext. 5159
Manager, Public Relations
christopher.sharkey@ambest.com
or
Jim
Peavy, +1-908-439-2200, ext. 5644
Director, Public Relations
james.peavy@ambest.com
Source: A.M. Best