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A.M. Best Affirms Ratings of First Colonial Insurance Company

^{Published on 2010-12-22 08:16:42 - Market Wire}
 

OLDWICK, N.J.--([ BUSINESS WIRE ])--A.M. Best Co. has affirmed the financial strength rating of A- (Excellent) and issuer credit rating of aa-a of First Colonial Insurance Company (First Colonial)(Jacksonville, FL). The outlook for both ratings is stable. First Coloniala™s ultimate parent is The Allstate Corporation (Allstate)(Northbrook, IL) (NYSE: ALL).

"Risk Management and the Rating Process for Insurance Companies"

The ratings are based on First Coloniala™s solid risk-adjusted capitalization and explicit and implicit support provided by Allstate. As a subsidiary of Allstate, First Colonial benefits from the Allstate Insurance Groupa™s expansive market presence and brand name recognition. First Coloniala™s capital position reflects its conservative investment risk profile and historical record of financial support from its ultimate parent. In addition, the company maintains modest underwriting leverage and an increased risk-adjusted capital position that is further enhanced by Allstate Insurance Company, which assumed a large book of auto roadside business ($69.0 million in premiums) that was previously assumed by First Colonial.

Partially offsetting these positive rating attributes is First Coloniala™s underwriting volatility in recent years and challenges to sales growth. Although First Coloniala™s underwriting results have shown improvement recently, economic factors and the impact on auto sales will continue to influence its underwriting performance.

The principal methodology used in determining these ratings is [ Besta™s Credit Rating Methodology -- Global Life and Non-Life Insurance Edition ], which provides a comprehensive explanation of A.M. Besta™s rating process and highlights the different rating criteria employed. Additional key criteria utilized include: aRisk Management and the Rating Process for Insurance Companiesa; aUnderstanding BCAR for Property/Casualty Insurersa; and aRating Members of Insurance Groups.a Methodologies can be found at [ www.ambest.com/ratings/methodology ].

Founded in 1899, A.M. Best Company is the worlda™s oldest and most authoritative insurance rating and information source. For more information, visit [ www.ambest.com ].

Copyright © 2010 by A.M. Best Company, Inc.ALL RIGHTS RESERVED.