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TMCNet:  AM Best Removes From Under Review With Developing Implications and Affirms Credit Ratings of T.H.E. Insurance Company

[February 07, 2019]

AM Best Removes From Under Review With Developing Implications and Affirms Credit Ratings of T.H.E. Insurance Company

AM Best has removed from under review with developing implications and affirmed the Financial Strength Rating of A- (Excellent) and the Long-Term Issuer Credit Rating of "a-" of T.H.E. Insurance Company (T.H.E.) (New Orleans, LA). The outlook assigned to these Credit Ratings (ratings) is stable.

The ratings reflect T.H.E.'s balance sheet strength, which AM Best categorizes as strong, as well as its marginal operating performance, limited business profile and appropriate enterprise risk management (ERM). Additionally, the company's ratings benefit from the financial support provided by the XL group, which became part of AXA S.A. following completion of the acquisition in September 2018.

T.H.E.'s risk-adjusted capitalization, as measured by Best's Capital Adequacy Ratio (BCAR), is categorized as strong, and AM Best expects it to remain at a similar level going forward. Due to material reserves strengthening, the company reported high combined ratios of 139.3% and 142.7% in 2016 and 2017, respectively. For the first nine months of 2018, T.H.E. generated an underwriting profit of USD 5.3 million and a combined ratio of 80.6%, and AM Best expects the company to return to profitability for the full year. T.H.E. provides property/casualty insurance coverage for the amusement and entertainment industry, and its ERM is centralized at the group evel.

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 Understanding 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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