A.M. Best Co. has upgraded the issuer credit ratings (ICR) to “bb+” from “bb” and affirmed the financial strength rating (FSR) of B (Fair) of First AcceptanceInsurance Group (First Acceptance) (Nashville, TN) and its members. Concurrently, A.M. Best has upgraded the ICR to “b” from “b-” for First Acceptance’s publicly traded parent holding company, First Acceptance Corporation (Delaware) (NYSE: FAC). The outlook for all ratings has been revised to positive from stable. (Please see below for a detailed listing of the companies.) The upgrading of the ICRs for First Acceptance reflects its reduced underwriting leverage, which has had a favorable impact on its overall capitalization, coupled with consistent fee and investment income. In addition, the group has seen improvement in its underwriting and operating performance since its reserve strengthening in 2007. The rating actions also contemplate that management continues to take steps to improve underwriting results including rate increases, closure of underperforming retail stores and more efficient use of technology. As a result of these actions (coupled with current economic conditions), premium production has slowed considerably, which has positively impacted underwriting leverage and overall risk-adjusted capitalization. The outlook contemplates the sustainability of favorable risk-adjusted capitalization, the adherence to adequate pricing and reserving discipline, and controlled growth. The ICRs have been upgraded to “bb+” from “bb” and the FSR of B (Fair) has been affirmed for First AcceptanceInsurance Group and its following pooled members:
First AcceptanceInsurance Company, Inc.
First Acceptance Insurance Company of Georgia, Inc.
First Acceptance Insurance Company of Tennessee, Inc.
For Best’s Credit Ratings, an overview of the rating process and rating methodologies,. please visit www.ambest.com/ratings. The principal methodologies used in determining these ratings, including any additional methodologies and factors that may have been considered, can be found at www.ambest.com/ratings/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. For more information, visit www.ambest.com.