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FOR IMMEDIATE RELEASE
OLDWICK - DECEMBER 19, 2014 09:22 AM (EST)
A.M. Best has upgraded the issuer credit rating (ICR) to "bbb+" from "bbb" and affirmed the financial strength rating (FSR) of B++ (Good) of Eastern Dentists Insurance Company RRG (EDIC) (Burlington, VT). The outlook for the ICR has been revised to stable from positive, while the outlook for the FSR remains stable.
The rating actions reflect EDIC's favorable operating performance demonstrated by strong loss experience and ongoing favorable reserve development, supportive capitalization and comprehensive enterprise risk management (ERM).
These attributes are partially offset by EDIC's market profile, which is characterized by a concentration of risk associated with being a mono-line writer of dental professional liability insurance.
EDIC is the leader in providing professional liability coverage to dentists, mainly in Massachusetts and the northeastern United States. The company is also gradually entering Virginia and New York markets and in 2013, EDIC acquired the renewal rights for a book of business in North Carolina. This has so far contributed to better operating results.
EDIC's management has developed and implemented a formal and comprehensive ERM program to regularly identify, quantify and address its operating and strategic risks and opportunities within its markets and line of business. EDIC maintains large aggregate policy limits up to $6 million, although only 20% of policies carry these limits. Reinsurance is in place that provides coverage in excess of retained limits. The company has a reinsurance structure established to protect future earnings and overall capitalization from the impact of an aggregate loss accumulation.
Additional positive rating actions could result from demonstration of measured premium growth through further penetration of existing markets or successful migration into new markets combined with consistent underwriting and operating profitability. This would include material improvement in EDIC's expense ratio. Negative rating actions could occur if the company experiences material adverse underwriting performance or significant weakening of its 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.
Key insurance criteria reports utilized:
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 visit A.M. Best's Ratings & Criteria Center .
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