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A.M. Best Upgrades Credit Ratings of Members of PURE Group of Insurance Companies

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A.M. Best has upgraded the Financial Strength Rating (FSR) to A
(Excellent) from A- (Excellent) and the Long-Term Issuer Credit Ratings
(Long-Term ICR) to "a" from "a-" for both members of the PURE Group of
Insurance Companies (PURE): Privilege Underwriters Reciprocal Exchange
and PURE Insurance Company. The outlook of these Credit Ratings
(ratings) has been revised to stable from positive. Both companies are
domiciled in Fort Lauderdale, FL.

The ratings reflect PURE's balance sheet strength, which A.M. Best
categorizes as very strong, as well as its adequate operating
performance, neutral business profile and appropriate enterprise risk
management.

PURE's balance sheet reflects the group's improved risk-adjusted
capitalization, predominantly as a result of strong growth in
policyholder surplus, along with enhancements to the catastrophe
reinsurance. Surplus growth in 2018 was significantly impacted by an
accounting change approved by the Florida regulator, which allowed for
deferred acquisition costs to be reduced by a portion of unearned
attorney-in-fact fees, due to their related party status. Additional
financial flexibility is provided through PURE's parent company and
outside sources, as well as from subscriber surplus contributions that
are anticipated to continue as new business is generated and retained
over several years. Partially offsetting these positive factors are the
group's increased reinsurance cessions and significant growth in direct
written premiums.

PURE has also reported improved operating performance in recent years
largely due to net loss ratios that compare favorably with industry
averages. The group's elevated expense ratio is largely a function of
the attorney-in-fact fees paid to affiliate PURE Risk Management, LLC.
However, the year to date expense ratio also reflects a one-time impact
of the large cession of unearned premium under a newly implemented 60%
whole account quota share contract effective June 1, 2018. While there
has been some weather-driven volatility in results, the core book of
business has performed well, primarily due to underwriting discipline
and rate actions.

The stable outlooks reflect A.M. Best's expectation that the group's
rating fundamentals will remain unchanged over the short to medium term.

This press release relates to Credit Ratings 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. 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 A.M. Best press releases, please view
Guide
for Media - Proper Use of Best's Credit Ratings and A.M. Best Rating
Action Press Releases
.

A.M. Best is a global rating agency and information provider with a
unique focus on the insurance industry. Visit
www.ambest.com
for more information
.

Copyright © 2018 by A.M. Best Rating Services, Inc. and/or its
affiliates. ALL RIGHTS RESERVED.

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