A.M. Best Upgrades Issuer Credit Rating of ARAG Insurance Company

OLDWICK, N.J.--(BUSINESS WIRE)-- A.M. Best has upgraded the issuer credit rating (ICR) to “a+” from “a” and affirmed the financial strength rating (FSR) of A (Excellent) of ARAG Insurance Company (ARAG) (Des Moines, IA). The outlook for the ICR has been revised to stable from positive, while the outlook for the FSR remains stable.

The upgrade reflects ARAG’s superior risk-adjusted capitalization and consistently strong operating performance driven by profitable underwriting, as well as the company’s expertise in providing coverages within the group legal expense market and relatively predictable claims development patterns. Partially offsetting these positive rating factors are ARAG’s heightened business risk as a mono-line carrier with its five largest policyholders accounting for a large portion of total premiums earned, and high annual dividend payments to its parent company, ARAG North America, Incorporated.

The stable outlook reflects A.M. Best’s expectation that ARAG’s underwriting results will remain strong over the near term and that risk-adjusted capitalization will continue to support its risk profile.

A.M. Best believes upward rating movement at this point is unlikely. The rating is primarily driven by the company’s history of long-term stability in its operating performance and business profile, as well as its superior risk-adjusted capitalization. If a material change were to occur in these metrics, there is a reasonable chance that it could cause a negative rating action.

This press release relates to rating(s) 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.

A.M. Best is the world’s oldest and most authoritative insurance rating and information source. For more information, visit www.ambest.com.

Copyright © 2016 by A.M. Best Company, Inc. and/or its affiliates. ALL RIGHTS RESERVED.

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A.M. Best
Robert Valenta, 908-439-2200, ext. 5291
Senior Financial Analyst
[email protected]
or
Raymond Thomson, ARe, ARM, 908-439-2200, ext. 5621
Senior Financial Analyst
[email protected]
or
Christopher Sharkey, 908-439-2200, ext. 5159
Manager, Public Relations
[email protected]
or
Jim Peavy, 908-439-2200, ext. 5644
Assistant Vice President, Public Relations
[email protected]

Source: A.M. Best Company, Inc.

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