S&P Affirms Granada Insurance Co. 'BBBpi' Financial Strength Rating

Apr 13, 2001, 01:00 ET from Standard & Poor's Ratings Services

    NEW YORK, April 13 /PRNewswire/ -- Standard & Poor's today affirmed its
 triple-'Bpi' financial strength rating on Granada Insurance Co. (Granada
 Insurance).
     Key rating factors include the company's very strong capitalization, good
 operating performance, sound reinsurance, and favorable reserve development,
 which are somewhat offset by limited product and geographic diversification.
     Headquartered in Miami, Fla., Granada Insurance (NAIC: 16870) specializes
 in writing commercial lines throughout its home state.  Product lines include
 commercial auto liability, commercial auto physical damage, property, general
 liability, garage liability, inland marine, and liquor liability insurance.
 Florida currently accounts for all of the company's revenue, but it has
 recently obtained a license to write in Georgia as well.  Its products are
 distributed primarily through independent general agents.  The company began
 business in 1987 and is privately owned.
 
     Major Rating Factors:
     -- At year-end 1999, capitalization was very strong, as indicated by a
 Standard & Poor's capital adequacy ratio of 150.5%.  The company's surplus,
 which was $6.4 million at year-end 1999, has grown at a compound annual rate
 of 18.5% since 1992.
     -- Operating performance has been good, with a five-year average ROR of
 8.8%.  Underwriting profitability is evident from a five-year average
 operating ratio of 89.1%.
     -- The largest net amount insured in any one risk is $75,000 because of
 a sound reinsurance program with General Reinsurance Corp. (triple-'A'
 financial strength rating).  Granada Insurance maintains excess-of-loss and
 catastrophe treaties as well as coverage provided by the Florida Hurricane
 Catastrophe Fund.
     -- Granada Insurance's two-year reserve development ratio has been
 favorable but volatile, with an average reserve release of 8.8% with respect
 to surplus since 1995.  The reported ratios have ranged from 31.4% redundant
 (negative development) to 8.8% deficient over the last five years.
     -- The company's geographic and product line concentrations are high
 with respect to current capitalization.  At year-end 1999, all of direct
 premiums were in Florida.
 
     Ratings with a 'pi' subscript are insurer financial strength ratings based
 on an analysis of an insurer's published financial information and additional
 information in the public domain.  They do not reflect in-depth meetings with
 an insurer's management and are therefore based on less comprehensive
 information than ratings without a 'pi' subscript.  Ratings with a 'pi'
 subscript are reviewed annually based on a new year's financial statements,
 but may be reviewed on an interim basis if a major event that may affect the
 insurer's financial security occurs.  Ratings with a 'pi' subscript are not
 subject to potential CreditWatch listings.
     Ratings with a 'pi' subscript generally are not modified with "plus" or
 "minus" designations.  However, such designations may be assigned when the
 insurer's financial strength rating is constrained by sovereign risk or the
 credit quality of a parent company or affiliated group, Standard & Poor's
 said. -- CreditWire.
 
 

SOURCE Standard & Poor's Ratings Services
    NEW YORK, April 13 /PRNewswire/ -- Standard & Poor's today affirmed its
 triple-'Bpi' financial strength rating on Granada Insurance Co. (Granada
 Insurance).
     Key rating factors include the company's very strong capitalization, good
 operating performance, sound reinsurance, and favorable reserve development,
 which are somewhat offset by limited product and geographic diversification.
     Headquartered in Miami, Fla., Granada Insurance (NAIC: 16870) specializes
 in writing commercial lines throughout its home state.  Product lines include
 commercial auto liability, commercial auto physical damage, property, general
 liability, garage liability, inland marine, and liquor liability insurance.
 Florida currently accounts for all of the company's revenue, but it has
 recently obtained a license to write in Georgia as well.  Its products are
 distributed primarily through independent general agents.  The company began
 business in 1987 and is privately owned.
 
     Major Rating Factors:
     -- At year-end 1999, capitalization was very strong, as indicated by a
 Standard & Poor's capital adequacy ratio of 150.5%.  The company's surplus,
 which was $6.4 million at year-end 1999, has grown at a compound annual rate
 of 18.5% since 1992.
     -- Operating performance has been good, with a five-year average ROR of
 8.8%.  Underwriting profitability is evident from a five-year average
 operating ratio of 89.1%.
     -- The largest net amount insured in any one risk is $75,000 because of
 a sound reinsurance program with General Reinsurance Corp. (triple-'A'
 financial strength rating).  Granada Insurance maintains excess-of-loss and
 catastrophe treaties as well as coverage provided by the Florida Hurricane
 Catastrophe Fund.
     -- Granada Insurance's two-year reserve development ratio has been
 favorable but volatile, with an average reserve release of 8.8% with respect
 to surplus since 1995.  The reported ratios have ranged from 31.4% redundant
 (negative development) to 8.8% deficient over the last five years.
     -- The company's geographic and product line concentrations are high
 with respect to current capitalization.  At year-end 1999, all of direct
 premiums were in Florida.
 
     Ratings with a 'pi' subscript are insurer financial strength ratings based
 on an analysis of an insurer's published financial information and additional
 information in the public domain.  They do not reflect in-depth meetings with
 an insurer's management and are therefore based on less comprehensive
 information than ratings without a 'pi' subscript.  Ratings with a 'pi'
 subscript are reviewed annually based on a new year's financial statements,
 but may be reviewed on an interim basis if a major event that may affect the
 insurer's financial security occurs.  Ratings with a 'pi' subscript are not
 subject to potential CreditWatch listings.
     Ratings with a 'pi' subscript generally are not modified with "plus" or
 "minus" designations.  However, such designations may be assigned when the
 insurer's financial strength rating is constrained by sovereign risk or the
 credit quality of a parent company or affiliated group, Standard & Poor's
 said. -- CreditWire.
 
 SOURCE  Standard & Poor's Ratings Services