Recently, credit rating agency A.M. Best Co. affirmed the Financial Strength Rating (:FSR) of “A+” and issuer credit ratings (:ICR) “aa–” of some of the subsidiaries of ProAssurance Corporation (PRA), namely – ProAssurance Casualty Company, ProAssurance Indemnity Company, Inc. and ProAssurance Specialty Insurance Company, Inc. The ratings carry a stable outlook.
Concurrently, the rating agency affirmed the ICR of the holding company at “a–” and the debt rating of ProAssurance’s 5.30% senior unsecured debt issuance of $250 million that is scheduled to mature in 2023. The indicative debt ratings on the senior unsecured and subordinated debt were affirmed at “a–” and “bbb+” respectively. A.M. Best also affirmed the debt ratings of “bbb” on the preferred stock of ProAssurance. All these ratings carried a stable outlook.
Further, A. M. Best affirmed the FSR and ICR of Medmarc Casualty Insurance Company, Noetic Specialty Insurance Company and Podiatry Insurance Company of America – three other subsidiaries of ProAssurance. These subsidiaries were previously allotted an FSR of “A” and ICR of “a” with a stable outlook. Also, another subsidiary, PACO Assurance Company, Inc.’s FSR of “A–” and ICR of “a–” were affirmed with a stable outlook.
The rating affirmation on the holding company came on the back of ProAssurance’s strong portfolio and risk-adjusted capital and robust operating leverage. Moreover, A.M. Best commended the company’s conservative reserving practices and legal defense and claims handling capacity. ProAssurance has a strong market presence in the medical professional liability space, legal professional liability line of business and life sciences and medical device liability space that also contributed positively to the ratings. Other attributes that led to the affirmation were ProAssurance’s enterprise risk management programs and policies. The stable outlook reflects A.M. Best’s optimistic outlook that ProAssurance will continue to perform well across all its businesses.
The ratings of Medmarc and Noetic are based on the respective companies’ financial and operational strengths and the extensive operational support received from the parent company.
Rating affirmations or upgrades from credit rating agencies play an important part in retaining investor confidence in the stock as well as maintaining creditworthiness in the market. We believe that ProAssurance’s present score with the credit rating agency will help it write more business going forward.
ProAssurance currently carries a Zacks Rank #3 (Hold). Some better-ranked stocks in the property and casualty insurance space include Allied World Assurance Company Holdings, AG (AWH), Cincinnati Financial Corp. (CINF) and CNA Financial Corporation (CNA). All these stocks carry a Zacks Rank #1 (Strong Buy).