A.M. Best Affirms Rating of The Republic Group Companies
DALLAS, Jan. 25, 2013 /PRNewswire/ -- The Republic Group (Republic) today announced A.M. Best Company has affirmed the financial strength rating of A- (Excellent) and credit rating outlook as "negative" for each of the group's companies.
The rating and outlook reflect the group's adequate risk-adjusted capitalization, conservative investment strategy, and strong, long-standing regional market presence. The group's adequate risk-adjusted capitalization is due to its on-going effort to reduce overall exposure concentration and conservative investment portfolio, which continues to produce favorable investment earnings that have partially mitigated underwriting losses to produce positive net income. The group's underwriting results have been volatile in recent years primarily due to frequent and severe weather-related events. In response, management has been de-emphasizing the property book of business, especially in commercial lines, taken significant rate increases, increased deductibles and reduced exposures in catastrophe prone areas. Also, the group strengthened reserves significantly in 2011 in commercial lines and management has implemented a comprehensive underwriting and claim corrective action plan. Despite the unprofitable underwriting performance, net income has generally been positive, driven by net investment income, fee income and realized capital gains, The group continues to maintain a strong regional market presence, especially in Texas and with its long standing agency relationships developed over its 110 year history.
"We recognize that our concentration of property exposures during a period of increased weather frequency, elevated expense structure and inadequate reserving in prior years were the primary drivers of our unprofitable underwriting performance. In response, we have strengthened the senior management team and implemented aggressive and comprehensive plans to return Republic to a solid underwriting performing company," said Joseph E. Mattingly, Republic's President and Chief Executive Officer. He added, "We are currently celebrating our 110th year anniversary and expect to be here another 110 years due to our stable foundation of loyal agents, dedicated underwriters and claims staff, diversified book of business and conservative financial position."
Republic Companies, Inc. provides personal and commercial property and casualty insurance products through a group of insurance companies and related entities designated in the industry as "The Republic Group". In its Independent Agents segments, Republic distributes these products to individuals and small to medium-size businesses through a network of independent agents primarily in Texas, Louisiana, Oklahoma, New Mexico, Mississippi and Arkansas. In its Program Management and Insurance Services segments, Republic capitalizes on its unique combination of charters and licenses to develop and manage target-niche insurance products that are distributed through managing general agents and other producers in many additional states. Republic Companies, Inc. is indirectly owned by Delek Group Ltd. Visit www.RepublicGroup.com for more information.
SOURCE The Republic Group