Best’s News & Research Service - September 18, 2013 03:18 PM (EDT)
A.M. Best Upgrades Issuer Credit Rating of Triangle Insurance Company, Inc.
OLDWICK, N.J. //BestWire// - A.M. Best Co. has upgraded the issuer credit rating to “bbb+” from “bbb” and affirmed the financial strength rating of B++ (Good) of Triangle Insurance Company, Inc. (Triangle) (Enid, OK). The outlook for all ratings is stable.
The rating action reflects Triangle’s excellent risk-adjusted capitalization achieved through capital contributions and significantly improved profitability since 2010 as a result of management's strong niche market knowledge within the agribusiness industry. In addition, Triangle’s average underwriting performance over the past five years compares favorably with that of the commercial casualty composite.
Partially offsetting these positive rating factors are the company's ongoing exposure to natural and man-made catastrophe losses, which somewhat subjects results to the potential for increased volatility in operating performance; its average operating results, which have underperformed the composite average over recent years; and to a lesser extent, the adverse loss reserve development on recent prior accident years. Despite these concerns, the outlook reflects the improved underwriting and operating performance in recent years, excellent risk-adjusted capitalization and strong local presence within the agribusiness market.
Positive rating actions could be taken on Triangle's ratings over the near term if underwriting and operating results remain strong and in line with projections, while maintaining a strong level of risk-adjusted capitalization.
Alternatively, key factors that could trigger negative rating actions include a downturn in operating profitability due to a weakening in underwriting performance or an increase in catastrophe-related losses, which weakens overall risk-adjusted capitalization.
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.