Safeway Insurance Group gained a ratings outlook upgrade from A.M. Best, thanks to solid rate increases and a number of strategic initiatives the ratings agency views as positive developments.
A.M. Best revised the insurer’s outlook to stable from negative. As well, it affirmed the insurer’s Financial Strength rating of A (Excellent) and the Long-Term Issuer Credit Rating of “A” for the members of Safeway Insurance Group.
Why the outlook upgrade? A.M. Best cited Safeway’s balance sheet strength, which it termed as “very strong,” plus its “adequate operating performance, neutral business profile and appropriate enterprise risk management.”
A.M. Best credited Safeway with improving its underwriting and operating results in 2018 and through the 2019 third quarter, and the ratings agency said those results will continue for the foreseeable future, thanks to “substantial rate increases in all states of operation, the re-underwriting of the non-standard auto book of business and various other strategic initiatives implemented in each state” of the insurer’s operation.
Another plus: A.M. Best likes Safeway’s “strongest level of risk-adjusted capitalization, modest underwriting leverage, strong liquidity measures, conservative investment risk profile, as well as minimal reinsurance dependence and catastrophe exposure.”
A.M. Best remains cautious about a few things, however, including adverse loss reserve development in most calendar and accident years, though it notes some recent reports of improved development trends.
Safeway’s operating performance had deteriorated from 2015 through 2017 due to increased loss frequency and severity trends, which had impacted the entire non-standard auto segment, and resulted in Safeway’s negative outlooks, A.M. Best noted.
Source: A.M. Best