The property insurer's gross and net probable maximum loss remains high, concludes AM Best
AM Best has affirmed the financial strength rating (FSR) of B+ (good) and issuer credit ratings (ICR) of “bbb-” of Allstate Floridian Insurance Group and its members. The outlook for all ratings is negative.
The negative outlook reflects Allstate Floridian’s continued significant exposure to catastrophic losses relative to its surplus.
As a predominant property writer in a state that is susceptible to catastrophes such as Florida, Allstate Floridian’s gross and net probable maximum loss remain high.
The ratings reflect Allstate Floridian’s adequate capitalisation, historically favourable operating results in years that major catastrophes did not occur and the financial and operating support from its ultimate insurance company parent, Allstate Insurance Company.
Partially offsetting these positive rating factors is the group’s geographic business concentration, which makes it susceptible to catastrophic loss accumulation, market dislocations and regulatory changes.
The ratings also recognise the variety of risk management initiatives that were recently implemented to reduce Allstate Floridian’s susceptibility to hurricane losses. Furthermore, Allstate Floridian has significantly enhanced its external catastrophe reinsurance protection.
Despite these initiatives, the group remains susceptible to catastrophic loss accumulation, market dislocations and regulatory changes.
Although, Allstate Floridian is separately capitalised and is not reinsured by its parent, the ratings reflect the ongoing operational and past financial support of Allstate.