AM Best has affirmed the Financial Strength Rating (FSR) of A+ (Superior) and the Long-Term Issuer Credit Ratings (Long-Term ICRs) of aa- of members of Old Republic Insurance Companies (Old Republic). (See below for a detailed list of companies.) Concurrently, AM Best has affirmed the FSR of A (Excellent) and the Long-Term ICR of a+ of Old Republic Insurance Company of Canada (Old Republic Canada) (Hamilton, Ontario). At the same time, AM Best has affirmed the FSR of A (Excellent) and the Long-Term ICRs of a+ of Old Republic National Title Insurance Company (Tampa, FL) and American Guaranty Title Insurance Company (Oklahoma City, OK) (collectively referred to as Old Republic Title Insurance Group [ORTIG]). In addition, AM Best has affirmed the FSR of B++ (Good) and the Long-Term ICR of bbb+ of Old Republic Life Insurance Company (ORL) (Chicago, IL). The outlook of these Credit Ratings (ratings) is stable. All companies are subsidiaries of Old Republic International Corporation [NYSE: ORI].
The ratings of Old Republic, which is considered the lead rating unit in the Old Republic International Corporation enterprise, reflect its balance sheet strength, which AM Best categorizes as strongest, as well as its strong operating performance, favorable business profile and appropriate enterprise risk management (ERM).
Old Republic is the flagship carrier for the Old Republic Insurance enterprise and one of the top 35 property/casualty insurers in the United States. It is a commercial lines insurance carrier that focuses predominantly on providing liability insurance for specific sectors of the North American economy. Major lines of business include workers compensation, commercial auto and general liability. Old Republic benefits from its expertise within the alternative risk transfer market and specialty commercial segments, as well as historically solid profitability, expertise in its respective individual business specialties and well-recognized franchises. Partially offsetting these positive rating factors is the variability in prior-year reserve development. In addition, Old Republic maintains an elevated exposure to common stocks within its investment portfolio; however, it remains within established tolerance levels. The company continues to have a very modest exposure to asbestos liabilities.
The ratings of Old Republic Canada reflect its balance sheet strength, which AM Best categorizes as very strong, as well as its adequate operating performance, neutral business profile and appropriate ERM.
The ratings of Old Republic Canada recognizes the synergies it gains as an affiliate of Great West Casualty Company, as well as its accident and sickness business. Partially offsetting these positive rating factors are the companys limited product offering and challenging market environment in Canada, which have impacted the companys underwriting performance in recent years, although the more recent years show improved results.
The ratings of ORTIG reflect its balance sheet strength, which AM Best categorizes as strongest, as well as its adequate operating performance, neutral business profile and appropriate ERM. The ratings of ORTIG also reflect the implicit support the group receives from its position in the Old Republic enterprise and its strategic role within the organization.
The ratings of ORTIG recognize its modest leverage measures and strong reserving practices. The majority of ORTIGs premiums and fees are generated through independent agents. This enables ORTIG to better manage down cycles, as fixed costs generally are lower for that distribution channel. An offsetting rating factor is the groups higher underwriting leverage measures due to the rapid increase in premium volume over the past five years. However, AM Best expects that ORTIG will continue to generate adequate underwriting and operating results while maintaining the strongest level of risk-adjusted capitalization in the near-to-medium term.
The ratings of ORL reflect its balance sheet strength, which AM Best categorizes as very strong, as well as its marginal operating performance, limited business profile and appropriate ERM.
The ratings of ORL also reflect its risk-adjusted capitalization, which is assessed as strongest, as measured by Bests Capital Adequacy Ratio (BCAR). Invested asset holdings are of good credit quality, as the portfolio is designed to minimize credit default risk rather than maximizing yield. Earnings generally have been positive but fluctuating in recent years. Due to the small size of the reserves, any increase in claims and/or mortality will cause large fluctuations in earnings. Premiums have declined over the past several years, as the closed term block premiums run off, and the occupational accident premiums were lower due to the termination of a large policy in 2018. The companys business profile consists of a closed block of term life insurance and the actively marketed occupational accident line. Despite its modest size, management maintains that ORL is important strategically.
The FSR of A+ (Superior) and the Long-Term ICRs of aa- have been affirmed, each with a stable outlook, for the following members of Old Republic Insurance Companies:
- BITCO General Insurance Corporation
- BITCO National Insurance Company
- Great West Casualty Company
- Manufacturers Alliance Insurance Company
- Old Republic General Insurance Corporation
- Old Republic Insurance Company
- Old Republic Lloyds of Texas
- Old Republic Surety Company
- Old Republic Union Insurance Company
- Pennsylvania Manufacturers Indemnity Company
- Pennsylvania Manufacturers Association Insurance Company
This press release relates to Credit Ratings that have been published on AM Bests website. For all rating information relating to the release and pertinent disclosures, including details of the office responsible for issuing each of the individual ratings referenced in this release, please see AM Bests Recent Rating Activity web page. For additional information regarding the use and limitations of Credit Rating opinions, please view Guide to Bests Credit Ratings. For information on the proper media use of Bests Credit Ratings and AM Best press releases, please view Guide for Media – Proper Use of Bests Credit Ratings and AM Best Rating Action Press Releases.
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