Recently, A.M. Best Co. raised the financial strength rating
of Pacific Compensation Insurance Company - a subsidiary of
) - to "A-" from "B++". The rating agency also upgraded Pacific
Compensation's issuer credit rating to "a-" from "bbb+". Further,
A.M. Best changed the outlook for both the ratings to stable from
The rating upgrade was based on the financial flexibility
provided to Pacific Compensation by Alleghany as well as the
support provided by Pacific Compensation's affiliate captive
reinsurer, AIHL Re, LLC. The subsidiary's strong management team
and business plans also supported the ratings, partly offset by
weak underwriting results in the past and lack of product and
A.M. Best does not expect any further upward revision in
ratings in the near future. However, a downward revision is
possible if Pacific Compensation's risk-adjusted capitalization
level falls below the requirement for the ratings, the
underwriting profits continue to remain weak or if the support
provided by Alleghany or AIHL Re falls significantly.
Rating affirmations or upgrades from credit rating agencies
play an important part in retaining investor confidence on the
stock as well as maintaining credit worthiness in the market. We
believe that the improved ratings will help Pacific Compensation
and Alleghany retain investor confidence and help them write more
businesses going forward, thereby boosting their results.
Alleghany currently carries a Zacks Rank #1 (Strong Buy).
Other property and casualty insurers with the same Zacks Rank are
Montpelier Re Holdings Ltd.
Hilltop Holdings Inc.
United Fire Group Inc.
HILLTOP HLDGS (HTH): Free Stock Analysis
MONTPELIER RE (MRH): Free Stock Analysis
UNITED FIRE GRP (UFCS): Free Stock Analysis
ALLEGHANY CORP (Y): Free Stock Analysis
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