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FOR IMMEDIATE RELEASE
OLDWICK, N.J. - JUNE 03, 2009 12:00 AM (EDT)
A.M. Best Co. has assigned a financial strength rating of A- (Excellent) and an issuer credit rating of "a-" to SU Insurance Company (SUIC) (Oak Creek, WI). The outlook assigned to both ratings is stable.
These ratings are based on SUIC's strong capitalization, long history of stable, profitable underwriting results through its affiliates within the privately held SU Group LLC (SU Group) and niche market expertise within the equipment break-down service contract segment.
Somewhat offsetting these positive rating factors is SUIC's limited market profile as a single product writer and weak investment earnings as a result of its conservative investment strategy, which has resulted in modest overall total return measures. The rating outlook reflects A.M. Best's expectation that SUIC will continue to generate consistent and profitable underwriting results while prudently growing its business.
SUIC writes equipment break-down service contracts for governmental bodies, educational institutions, financial institutions, health care facilities, pharmaceutical companies and the office automation equipment operations of other commercial entities. All insured items are classified as low-voltage equipment (i.e., computers, copiers and select medical equipment). The company does not insure the replacement of equipment, only the cost to repair. Historically, equipment maintenance policies were issued through SU Group affiliates via a fronting relationship or as a managing general agent. Beginning in 2005, SUIC was formed to directly insure policies in states where it held licenses and to reinsure equipment maintenance risks in other states.
Positive factors are supported by the company's very low underwriting leverage and negligible credit risk as all risks are retained by SUIC. The company does not utilize reinsurance as loss exposures are very low and fluctuate within a narrow band. Furthermore, while SUIC is a relatively new company, the business has been underwritten through its non-insurance sister companies within the SU Group since the 1980s with very stable and profitable loss ratios. SUIC's management and infrastructure is the same as that of SU Group, and SU Group has demonstrated the ability to produce a long history of positive results.
For Best's Credit Ratings, an overview of the rating process and rating methodologies, please visit Best's Ratings & Analysis.
The principal methodologies used in determining these ratings, including any additional methodologies and factors that may have been considered, can be found at Best's Credit Rating Methodology.
Founded in 1899, A.M. Best Company is a global full-service credit rating organization dedicated to serving the financial and health care service industries, including insurance companies, banks, hospitals and health care system providers.