AM Best Affirms Credit Ratings of First Colonial Insurance Company

OLDWICK, N.J.--(BUSINESS WIRE)-- AM Best has affirmed the Financial Strength Rating of A (Excellent) and the Long-Term Issuer Credit Rating of “a” of First Colonial Insurance Company (First Colonial) (Jacksonville, FL). The outlook of these Credit Ratings (ratings) is stable.

The ratings reflect First Colonial’s balance sheet strength, which AM Best categorizes as very strong, as well as its weak operating performance, neutral business profile and appropriate enterprise risk management.

The ratings recognize the company’s volatile and unprofitable underwriting performance over the past few years, which is influenced by a host of economic factors, including auto sales and loans. First Colonial’s loss ratio has trended upward due to elevated losses associated with its Guaranteed Auto Protection (GAP) product. In an effort to improve the GAP loss experience, management has implemented a host of mitigation initiatives, which include rate increases, enhancements to its pricing segmentation and various other risk management actions. In addition, management is focusing its business mix to more profitable products in the vehicle services and ancillary automobile spaces. As a result of these actions, operating results improved in 2018 and through the first nine months of 2019.

The ratings continue to reflect the company’s strongest risk-adjusted capitalization, as measured by Best’s Capital Adequacy Ratio (BCAR). The ratings also benefit from the explicit and implicit support provided by The Allstate Corporation (Allcorp), its ultimate parent. As a subsidiary of Allcorp, First Colonial benefits from its expansive market presence and brand-name recognition.

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 Understanding 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 provider specializing in the insurance industry. The company does business in more than 100 countries. Headquartered in Oldwick, NJ, AM Best has offices in cities around the world, including London, Amsterdam, Dubai, Hong Kong, Singapore and Mexico City. For more information, visit www.ambest.com.

Copyright © 2019 by A.M. Best Rating Services, Inc. and/or its affiliates. ALL RIGHTS RESERVED.

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Edin Imsirovic
Senior Financial Analyst
+1 908 439 2200, ext. 5740
[email protected]

Greg Williams
Senior Director
+1 908 439 2200, ext. 5815
[email protected]

Christopher Sharkey
Manager, Public Relations
+1 908 439 2200, ext. 5159
[email protected]

Jim Peavy
Director, Public Relations
+1 908 439 2200, ext. 5644
[email protected]

Source: AM Best

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