A.M. Best Affirms Ratings of First Colonial Insurance Company

OLDWICK, N.J.--(BUSINESS WIRE)--

A.M. Best has affirmed the financial strength rating of A (Excellent) and the issuer credit rating of "a" of First Colonial Insurance Company (First Colonial) (Jacksonville, FL). The outlook for each rating is stable.

The rating affirmations reflect First Colonial's solid risk-adjusted capitalization, consistent generation of pre-tax operating income, and continued progress in the diversification of its portfolio and product mix into multiple distribution channels. The ratings also benefit from the explicit and implicit support provided by its ultimate parent, The Allstate Corporation (Allstate) ALL. As a subsidiary of Allstate, First Colonial benefits from its expansive market presence and brand name recognition.

These positive rating factors are partially offset by the company's variable underwriting performance, which is highly influenced by a host of economic factors, including auto sales. Recently, First Colonial has experienced an upward trend in its loss ratio due to elevated losses associated with its Guaranteed Auto Protection (GAP) product. In an effort to improve the GAP loss experience, management has implemented a host of mitigation initiatives, which include rate increases, enhancements to its pricing segmentation and various other risk management actions.

Negative rating action could occur if underwriting or operating results deteriorate significantly, which results in a material decline in overall risk-adjusted capitalization. In addition, negative rating action could occur if there is a lessening of parental support provided to First Colonial.

This press release relates to rating(s) that have been published on A.M. 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 A.M. Best's Recent Rating Activity web page.

A.M. Best is the world's oldest and most authoritative insurance rating and information source. For more information, visit www.ambest.com.

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