Ratings Roundup: ASI Preferred, Preserver

August 6, 2008

A.M. Best Co. has assigned a financial strength rating (FSR) of ‘A-‘ (Excellent) and issuer credit ratings (ICR) of “a-” to Florida-based ASI Preferred Insurance Corporation, following the inclusion of the company in the American Strategic Insurance Group (ASI Group). The outlook for the ratings is stable. “The rating actions reflect ASI Preferred’s favorable risk-adjusted capitalization and moderate premium leverage measures,” said best. “In addition, the ratings contemplate ASI Group’s experienced management team with a track record of success in the Florida marketplace, as demonstrated in its profitable operating performance.” Best also indicated that it expects ASI Preferred to maintain “solid risk-adjusted capital, moderate operating leverage measures and profitable performance, consistent with ASI Group, which employs prudent underwriting standards, innovative pricing systems and effective reinsurance programs. These positive rating factors are somewhat offset by ASI Preferred’s geographic concentration of risk in Florida, with subsequent exposure to weather-related events and significant dependence on reinsurance, as well as its narrowly focused product base.”

As part of its announcement concerning Tower Group (See above), A.M. Best has also upgraded the FSRs to ‘A-‘ (Excellent) from ‘B++’ (Good) and the ICRs to “a-” from “bbb+” for the former members of Preserver Insurance Group of Paramus, NJ. Group members are Preserver Insurance Company and Mountain Valley Indemnity Company of Bedford, NH, as well as North East Insurance Company of Scarborough, Maine. However, Best said the “ratings have been placed under review with negative implications,” as have those of Tower Group, to which these companies now belong. Best also noted that it has withdrawn the ratings and assigned a category NR-5 (Not Formally Followed) to Preserver Insurance, because the group’s members are now part of Tower. These former members of Preserver Insurance were acquired by Tower on April 10, 2007.” The upgrades reflect the participation of these companies in a pool that includes Tower Insurance Company of New York. The pooling agreement was executed on January 1, 2008.

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