AM Best Affirms Credit Ratings of Subsidiaries of Old Republic International Corporation
12 Julho 2023 - 1:00PM
Business Wire
AM Best has affirmed the Financial Strength Rating (FSR)
of A+ (Superior) and the Long-Term Issuer Credit Ratings (Long-Term
ICRs) of “aa-” (Superior) of the members of Old Republic Insurance
Companies (Old Republic). Concurrently, AM Best has affirmed the
FSR of A+ (Superior) and the Long-Term ICRs of “aa-” (Superior) of
Old Republic National Title Insurance Company (Tampa, FL) and
American Guaranty Title Insurance Company (Oklahoma City, OK)
(collectively referred to as Old Republic Title Insurance Group
[ORTIG]). At the same time, AM Best has affirmed the FSR of A
(Excellent) and the Long-Term ICR of “a+” (Excellent) of Old
Republic Insurance Company of Canada (Old Republic Canada)
(Hamilton, Ontario). In addition, AM Best has affirmed the FSR of
B++ (Good) and the Long-Term ICR of “bbb+” (Good) of Old Republic
Life Insurance Company (ORL) (Chicago, IL). The outlook of these
Credit Ratings (ratings) is stable. All companies are subsidiaries
of Old Republic International Corporation (ORI) [NYSE: ORI].
The ratings of Old Republic, which is considered the lead rating
unit in the Old Republic International Corporation enterprise,
reflect its balance sheet strength, which AM Best assesses as
strongest, as well as its strong operating performance, favorable
business profile and appropriate enterprise risk management
(ERM).
Old Republic is the flagship group for the Old Republic
Insurance enterprise and one of the top 35 property/casualty
insurers in the United States. The group is made up of commercial
lines insurance carriers that focus predominantly on providing
liability insurance for specific sectors of the North American
economy. Major lines of business include workers’ compensation,
commercial auto and general liability. Old Republic benefits from
its expertise within the alternative risk transfer market and
specialty commercial segments, as well as historically solid
profitability, expertise in its respective individual business
specialties and well-recognized franchises. The company continues
to have a very modest exposure to asbestos liabilities.
The ratings of ORTIG reflect its balance sheet strength, which
AM Best assesses as strongest, as well as its adequate operating
performance, neutral business profile and appropriate ERM. The
ratings of ORTIG also reflect the implicit support the group
receives from its position in the Old Republic enterprise and its
strategic role within the organization.
The ratings of ORTIG recognize its strong reserving practices.
With a majority of ORTIG’s premiums and fees generated through
independent agents, a significant portion of its expenses are
variable. This enables ORTIG to manage down cycles better, as fixed
costs generally are lower for that distribution channel. AM Best
expects that ORTIG will continue to generate underwriting and
operating results that are in line with its title competitors,
despite the impact of higher mortgage interest rates, which has led
to a steep drop in mortgage originations and refinance activity. AM
Best expects that ORTIG will remain a significant contributor to
the overall profitability of the Old Republic International
Corporation enterprise, while maintaining the strongest level of
risk-adjusted capitalization in the intermediate term, as measured
by Best’s Capital Adequacy Ratio (BCAR). The title group continues
to be integral to the overall organization, with common branding
and talent synergies, as well as complementary ERM programs.
The ratings of Old Republic Canada reflect its balance sheet
strength, which AM Best assesses as very strong, as well as its
adequate operating performance, neutral business profile and
appropriate ERM.
The ratings of Old Republic Canada recognize the synergies it
gains as an affiliate of Great West Casualty Company, as well as
its accident and sickness business. Partially offsetting these
positive rating factors are the company’s limited product offering
and challenging market environment in Canada.
The ratings of ORL reflect its balance sheet strength, which AM
Best assesses as very strong, as well as its marginal operating
performance, limited business profile and appropriate ERM.
The ratings of ORL also reflect its risk-adjusted
capitalization, which is assessed at the strongest level, as
measured by BCAR. Invested asset holdings are of good credit
quality, as the portfolio is designed to minimize credit default
risk rather than maximizing yield. Earnings have been positive in
recent years. Due to the small size of the ORL’s reserves, any
increase in claims or mortality could cause a material change to
ORL’s earnings, but should not materially impact ORI. Premiums have
declined over the past several years, as the closed-term block
premiums run off, and the occupational accident premiums trend
lower. The company’s business profile consists of a closed block of
term life insurance and the actively marketed occupational accident
line. Despite its modest size, ORL is important strategically to
the Old Republic organization.
The FSR of A+ (Superior) and the Long-Term ICRs of “aa-”
(Superior) have been affirmed, each with a stable outlook, for the
following members of Old Republic Insurance Companies:
- BITCO General Insurance Corporation
- BITCO National Insurance Company
- Great West Casualty Company
- Manufacturers Alliance Insurance Company
- Old Republic General Insurance Corporation
- Old Republic Insurance Company
- Old Republic Surety Company
- Old Republic Union Insurance Company
- Pennsylvania Manufacturers Indemnity Company
- Pennsylvania Manufacturers’ Association Insurance Company
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 Guide to Best's Credit Ratings. For information
on the proper use of Best’s Credit Ratings, Best’s Performance
Assessments, Best’s Preliminary Credit Assessments and AM Best
press releases, please view Guide to Proper Use of Best’s
Ratings & Assessments.
AM Best is a global credit rating agency, news publisher and
data analytics provider specializing in the insurance industry.
Headquartered in the United States, the company does business in
over 100 countries with regional offices in London, Amsterdam,
Dubai, Hong Kong, Singapore and Mexico City. For more information,
visit www.ambest.com.
Copyright © 2023 by A.M. Best Rating
Services, Inc. and/or its affiliates. ALL RIGHTS RESERVED.
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Robert Valenta, CPCU Senior Financial Analyst
+1 908 882 2407 robert.valenta@ambest.com
Erik Miller Director +1 908 882 2120
erik.miller@ambest.com
Christopher Sharkey Associate Director, Public
Relations +1 908 882 2310
christopher.sharkey@ambest.com
Al Slavin Senior Public Relations Specialist +1
908 882 2318 al.slavin@ambest.com
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