OLDWICK, N.J.–(BUSINESS WIRE)–AM Best affirmed the Financial Strength Rating (FSR) of A+ (Superior) and the Long-Term Issuer Credit Ratings (Long-Term ICR) of “aa” of the members of Allstate Insurance Group (Allstate). Additionally, AM Best has affirmed the FSR of A (Excellent) and the Long-Term ICRs of “a” of the members of Allstate New Jersey Insurance Group (collectively referred to as Allstate New Jersey) (headquartered in Bridgewater, NJ). Concurrently, AM Best has affirmed the FSR of A+ (Superior) and the Long-Term ICRs of “aa” of the key life/health members of the Allstate Life Group (Allstate Life). At the same time, AM Best has affirmed the Long-Term ICR of “a”, and all existing Long- and Short-Term Issue Credit Ratings (Long-Term IR; Short-Term IR) of the ultimate parent, The Allstate Corporation (Allcorp). The outlook of these Credit Ratings (ratings) is stable.
All the above named companies are headquartered in Northbrook, IL, except where specified. (See link below for a detailed listing of the companies and ratings.)
The ratings reflect Allstate’s balance sheet strength, which AM Best categorizes as strongest, as well as its strong operating performance, favorable business profile and very strong enterprise risk management (ERM). Allstate’s strong capital position reflects its favorable earnings, which have contributed to organic surplus growth in each of the past five years on a pre-dividend basis. Allstate’s operating results continue to be favorable due to enhanced pricing sophistication and improved loss cost and expense management while maintaining underwriting discipline. Additionally, Allstate has a significant market presence and strong overall business profile as one of the largest personal lines writers in the United States. Allstate also benefits from the additional liquidity provided by Allcorp and its subsidiary, Kennett Capital, Inc., and through access to capital markets, lines of credit and its commercial paper program. The group’s favorable margins are attributable to enhanced pricing accuracy and risk optimization, along with its solid core underwriting capabilities, prudent capital management and sizable investment income. Lastly, underwriting results also reflect the favorable impact of Allstate’s ongoing risk management actions, various expense management initiatives and its significant investment in innovation, as Allstate has shown the ability to adapt quickly to market trends to ensure continued underwriting and operating profitability.
Partially offsetting these positive rating attributes is Allstate’s inherent exposure to natural disasters due to its expansive market presence throughout the United States. However, Allstate over the past several years has maintained an extensive catastrophe risk exposure management program, which includes a significantly enhanced property catastrophe reinsurance program, stricter underwriting guidelines, increased deductibles and discontinuance of selected lines of coverage, including earthquake. In addition, this expansive geographic presence provides inherent diversification against the impact of one or few significant weather events. The group’s underwriting results in recent years have benefited from these risk-management actions. While the group maintains above-average underwriting and investment leverage, relative to industry norms, it has maintained capital levels supportive of its business risks.
The ratings of Allstate New Jersey reflect its balance sheet strength, which AM Best categorizes as very strong, as well as its strong operating performance, limited business profile and appropriate ERM. Additionally, the ratings recognize the financial strength, ERM and continued support of Allstate Insurance Company, as well as Allcorp. Allstate New Jersey has risk-adjusted capitalization at the strongest level, consistently profitable operating performance and management’s local market knowledge. These positive rating attributes are offset partially by the group’s business concentration within one state, resulting in potential operating variability due to local market disruptions and localized catastrophe weather events. The ratings further recognize the consistent profitability trends in underwriting in recent years, along with the expectation that trends in capitalization and operating performance will continue in the near to medium term.
The ratings of Allstate Life reflect its balance sheet strength, which AM Best categorizes as very strong, as well as its strong operating performance, favorable business profile and very strong ERM. Additionally, the ratings recognize the financial strength and continued support of Allstate Insurance Company, as well as Allcorp. Allstate Life’s balance sheet continues to be anchored by risk-adjusted capitalization at the strongest level, as measured by Best’s Capital Adequacy Ratio (BCAR). AM Best notes that while the company had been exposed to above-average investment risk, with higher mortgage loan and equity holdings than its peers, exposure has declined moderately. Allstate Life has reported top-line growth in line with expectations across core products, with revenue supported by a steady stream of investment income. Despite the competitive and challenging employee benefits market, Allstate Life continues to maintain favorable market position, further enhance its product portfolio and focus on the implementation of innovative customer-facing capabilities.
A complete listing of The Allstate Corporation and its property/casualty and life/health subsidiaries’ FSRs, Long-Term ICRs and Long- and Short-Term IRs also is available.
This press release relates to Credit Ratings that have been published on AM Best’s 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 Best’s Recent Rating Activity web page. For additional information regarding the use and limitations of Credit Rating opinions, please view Guide to Best’s Credit Ratings. For information on the proper media use of Best’s Credit Ratings and AM Best press releases, please view Guide for Media – Proper Use of Best’s Credit Ratings and AM Best Rating Action Press Releases.
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