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FOR IMMEDIATE RELEASE
OLDWICK - MAY 24, 2017 01:42 PM (EDT)
A.M. Best has upgraded the Long-Term Issuer Credit Rating (Long-Term ICR) to “bbb+” from “bbb” and affirmed the Financial Strength Rating (FSR) of B++ (Good) of Spartan Insurance Company (Spartan) (Pearland, TX). The outlook of the FSR has been revised to positive from stable, while the outlook of the Long-Term ICR remains positive.
The rating actions reflect the continuation of Spartan’s favorable operating performance, minimal liabilities and continued surplus appreciation. These positive rating factors are driven by Spartan’s niche focus as a direct writer of non-owner private passenger auto liability business, which has resulted in consistent underwriting and operating profits over the past five years. Profitable underwriting gains have led to organic surplus generation and decreased underwriting leverage ratios. Spartan’s favorable underwriting performance is driven by minimal losses and claims activity, since inception of the non-owner product. In addition, Spartan has supplemented their underwriting gains with consistent investment income year-over-year.
These positive rating factors are partially offset by Spartan’s elevated expense position and geographic concentration of risk as a primarily single-state writer. In recent years, Spartan has gained approval to, and subsequently began, writing their product in Louisiana. Spartan continues to explore near-term opportunities to offer non-owner private passenger auto liability in other states. However, as Spartan continues to enter into other states, its results are exposed to judicial, economic and regulatory changes. Any material changes in these areas could potentially have a negative impact on the company’s overall profitability.
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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