OLDWICK, NJ–(BUSINESS WIRE)–AM Best upgraded the long-term issuer rating (long-term ICR) from “bbb” (good) to “bbb” (good) and affirmed the financial strength rating (FSR) of B++ (good) of Genesee Patrons Cooperative Insurance Company (Genesee) (Batavia, NY). The outlook for the long-term ICR has been revised from positive to stable, while the outlook for the FSR is stable.
The credit ratings (ratings) reflect Genesee’s balance sheet strength, which AM Best assesses as strong, as well as its adequate operating performance, limited business profile and appropriate management of business risks.
The long-term ICR upgrade reflects the continued improvement in Genesee’s balance sheet strength, reflecting the highest level of risk-adjusted capitalization, as measured by the capital adequacy ratio (BCAR) of Best, and the organic growth of the surplus in eight of the previous 10 years. , mainly driven by constant operating profitability. In addition, the company’s balance sheet strength reflects overall liquidity metrics which are bolstered by positive underwriting and operating cash flow, and its stable loss provisioning trends, as the company has generally reported a favorable development during most calendar years and accidents. However, the company’s high equity position in the investment portfolio partially offsets these positive factors, leaving a surplus sensitive to equity market volatility.
The company’s profitable operating results are primarily due to strong and consistent underwriting results in each of the past five years. Additionally, Genesee has limited financial flexibility and scale of operations. The company’s business profile is limited due to its product offering as a single-state property insurer and its geographic focus in New York.
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