A.M. Best has upgraded the financial strength rating (FSR) to A+ (Superior) from A (Excellent) and the issuer credit rating (ICR) to “aa-” from “a+” of RSUI Indemnity Company and its reinsured subsidiaries, Landmark American Insurance Company and Covington Specialty Insurance Company, collectively referred to as the RSUI Group (RSUI) (headquartered in Atlanta, GA). The outlook for the ratings has been revised to stable from positive.
Concurrently, A.M. Best has affirmed the FSR of A (Excellent) and the ICRs of “a” of Capitol Indemnity Corporation and its two subsidiaries, Platte River Insurance Company and Capitol Specialty Insurance Corporation, which operate under a pooling agreement, collectively referred to as Capitol Insurance Group (Capitol) (headquartered in Middleton, WI). The outlook for these ratings is stable.
A.M. Best also has affirmed the FSR of A- (Excellent) and the ICR of “a-” of Pacific Compensation Insurance Company (Pacific Comp) (headquartered in Agoura Hills, CA). The outlook for these ratings is stable based on A.M. Best’s expectation of further explicit support through intercompany reinsurance or direct capital support. All companies are indirect, wholly-owned subsidiaries of Alleghany Corporation (Alleghany) (headquartered in New York, NY) (NYSE:Y).
The upgrading of RSUI’s ratings reflects its continued strong capitalization, excellent historical underwriting profitability and the benefits it derives from being part of Alleghany. Partially offsetting these positive rating factors are RSUI’s dependence on reinsurance and exposure to weather-related events as evidenced by the losses from Superstorm Sandy.Further potential upward movement on RSUI’s ratings could result from continued superior underwriting results and maintenance of a strong risk-adjusted capital position. Downward movement on the ratings could result from a material decline in the organization’s capitalization, negative trends in claim frequency or severity that could materially impair underwriting results, as well as a significant decline in equity capital markets and its impact on RSUI’s investment portfolio and capitalization.