AM Best


A.M. Best Affirms Credit Ratings of Members of Ally Insurance Group


CONTACTS:

Edward J. Zonenberg
Senior Financial Analyst
+1 908 439 2200, ext. 5135
edward.zonenberg@ambest.com

Charles M. Huber
Director
+1 908 439 2200, ext. 5122
charles.huber@ambest.com

Christopher Sharkey
Manager, Public Relations
+1 908 439 2200, ext. 5159
christopher.sharkey@ambest.com

Jim Peavy
Director, Public Relations
+1 908 439 2200, ext. 5644
james.peavy@ambest.com

FOR IMMEDIATE RELEASE

OLDWICK - AUGUST 16, 2017 02:46 PM (EDT)
A.M. Best has affirmed the Financial Strength Rating of B++ (Good) and the Long-Term Issuer Credit Ratings of “bbb+” of the members of the Ally Insurance Group (Ally Insurance). The members include Motors Insurance Corporation and its reinsured subsidiaries, MIC Property and Casualty Insurance Corporation and CIM Insurance Corporation, as well as an affiliate, Ally International Insurance Company, Ltd. (AIICL). The outlook of these Credit Ratings (rating) is stable. All companies are domiciled in Detroit, MI, except AIICL, which is domiciled in Bermuda.

The ratings reflect Ally Insurance’s supportive balance sheet strength, positive earnings and well-established market presence as a specialized underwriter of vehicle service contracts (VSC). These positive rating factors are offset somewhat by the credit profile of its ultimate parent, Ally Financial Inc. (Ally Financial), which is rated below investment grade by other nationally recognized statistical rating organizations, and to a lesser extent, by the group’s below-average profitability and concentration of underwriting risk in auto warranty lines. The ratings also consider the group’s higher-than-average expense structure and susceptibility to weather-related losses, which have contributed to a decline in underwriting performance in recent years.

Ally Insurance’s positive rating attributes are derived from management’s focused operating strategy, extensive product knowledge and established track record of solid earnings generated from its long-term VSC business. The group has consistently generated capital through operating earnings reflective of disciplined underwriting, and a steady stream of investment income and realized gains. However, results in recent years have been marred by losses on its automobile physical damage line due to severe weather events.

Management is committed to maintaining risk-adjusted capital at a level consistent with its ratings. Operating results should improve as a result of expansion outside of General Motors-related business, its transition to an independent finance and insurance provider, and due to additional property catastrophe reinsurance protection.

Factors that may lead to positive rating actions include improved underwriting performance that benefits from reduced catastrophe losses and outperforms peers over time, and continued improvement in the ratings of Ally Financial.

Factors that could lead to negative rating actions include operating performance being impacted negatively by underwriting losses stemming from a significant increase in catastrophe losses, which causes a decline in risk-adjusted capital that no longer supports the current ratings, or a downgrade in the published credit ratings or CDS prices of Ally Financial.

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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