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FOR IMMEDIATE RELEASE
OLDWICK - SEPTEMBER 06, 2018 03:21 PM (EDT)
A.M. Best has revised the outlooks to positive from stable and affirmed the Financial Strength Rating of A- (Excellent) and the Long-Term Issuer Credit Rating of “a-” of Restoration Risk Retention Group, Incorporated (RRRG) (Burlington, VT).
The ratings reflect RRRG’s balance sheet strength, which A.M. Best categorizes as very strong, as well as its adequate operating performance, limited business profile and appropriate enterprise risk management.
The revision of the outlooks reflects RRRG’s continuing improvement in its operating performance and its ability to outperform the industry averages despite the inherent challenges that come along with being a mono-line specialty, niche insurer. Instead, RRRG has used this expertise to its advantage by conducting business in all 50 states with ready access to more than 1,700 independent Servpro franchisees, and its partnership with Servpro Industries in providing best practices training and loss prevention tactics to those Servpro franchisees that RRRG insures. Loss adjustment expenses have experienced less volatility and have trended more favorably over the past three years due to improvement in claims management and litigation strategies. The steps taken by management have significantly improved underwriting profitability, which A.M. Best anticipates to continue without material deviation.
The ratings also reflect management’s prudent risk management philosophy and RRRG’s very strong balance sheet that is supported by its solid future earnings prospects, letters of credit provided by Servpro and a conservative reserving approach. RRRG management has taken additional action in recent years to reduce balance sheet exposure to equity market volatility and enhance its risk-adjusted capitalization.
Positive rating action could occur if operating results continue to improve without divergence from the company’s risk management strategy and very strong balance sheet strength assessment. Negative rating action could occur if risk-adjusted capitalization materially weakens. Negative rating action also could occur if underwriting losses re-emerge and re-introduce material volatility in operating performance.
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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