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FOR IMMEDIATE RELEASE
OLDWICK - APRIL 15, 2014 01:11 PM (EDT)
A.M. Best has upgraded the financial strength rating to B+ (Good) from B (Fair) and issuer credit rating to "bbb-" from "bb+" of Spartan Insurance Company (Spartan) (Pearland, TX). The outlook for both ratings remains stable.
The positive rating actions reflect Spartan's profitable underwriting performance, declining liabilities and improved overall risk-adjusted capitalization. This is due primarily to a shift in Spartan's business profile to a direct writer of non-owner's private passenger auto liability business, which has resulted in positive underwriting income and a below break-even combined ratio during the last two years. In addition, Spartan maintains a conservative investment portfolio and favorable underwriting leverage measures.
These positive rating factors are partially offset by Spartan's elevated expense position and geographic concentration of risk. As a single state writer with limited product offerings, Spartan's results are exposed to judicial, economic and regulatory changes.
Negative pressure on the ratings could occur if Spartan incurs material losses in its capitalization, experiences a reduction in profitability or has substantial adverse reserve development. Positive rating actions are contingent upon a continuation of favorable operating results and improved risk-adjusted capitalization while maintaining adequate leverage measures.
The methodology used in determining these ratings is Best's Credit Rating Methodology, which provides a comprehensive explanation of A.M. Best's rating process and contains the different rating criteria employed in the rating process. Best's Credit Rating Methodology can be found at www.ambest.com/ratings/methodology.
A.M. Best Company is the world's oldest and most authoritative insurance rating and information source.