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FOR IMMEDIATE RELEASE
OLDWICK - NOVEMBER 16, 2017 10:20 AM (EST)
A.M. Best has revised the outlooks to stable from negative and affirmed the Financial Strength Rating of B+ (Good) and the Long-Term Issuer Credit Rating of “bbb-” of Pacific Pioneer Insurance Company (Pacific Pioneer) (Cypress, CA).
The stable outlooks are based on Pacific Pioneer’s improved underwriting results and operating earnings in recent years, which has led to surplus growth and increased risk-adjusted capitalization.
The rating affirmations reflect Pacific Pioneer’s supportive level of risk-adjusted capitalization, conservative investment risk profile and local market expertise. Partially offsetting these positive factors are Pacific Pioneer’s unfavorable five-year operating performance and limited business profile, as it has assumed a majority of its business from a third-party carrier.
The positive rating factors include Pacific Pioneer’s local market knowledge, derived from its long-standing relationships within California’s sizeable Asian communities. Management has implemented several initiatives over recent years, some of which have included the implementation of rate adjustments, the reorganization of its claims operation and the installation of a new system for better loss tracking and pricing.
Pacific Pioneer’s negative rating factors include its limited business profile, as it has been dependent on a third-party carrier to write a considerable portion of its business on a direct basis. However, this business is produced by Pacific Pioneer’s affiliated agency and a portion is assumed from this carrier. In addition, Pacific Pioneer has reported unfavorable five-year underwriting and operating earnings relative to industry norms. These results were primarily attributable to several major commercial multi-peril fire claims, which occurred in late 2013 and in 2014. Lastly, as a predominantly California commercial and personal lines writer, Pacific Pioneer is exposed to market competition, regulatory changes and judicial decisions.
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.
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