AM Best has upgraded the long-term issuer credit rating to “a+” (excellent) from “a” (excellent) and affirmed the financial strength rating of ‘A’ (excellent) of Vermont-domiciled Restoration Risk Retention Group (RRRG).
In addition, AM Best has revised the outlook of the long-term ICR to stable from positive, while the FSR is stable.
RRRG is a quasi-captive writing policies solely for the benefit of ServPro franchises and underwrites business in all 50 states.
The captive benefits from its advantage of providing coverage only for its sponsor’s franchises, enabling a low-cost structure in terms of underwriting expenses.
These ratings reflect RRRG’s balance sheet strength, which AM Best assesses as very strong, as well as its strong operating performance, neutral business profile and appropriate enterprise risk management.
The stable outlooks consider AM Best’s expectation that RRRG will maintain its balance sheet strength assessment at the very strong level while producing strong operating results and maintaining prudent risk management.
RRRG’s balance sheet strength assessment is underpinned by its risk-adjusted capitalisation, which is at the strongest level, as measured by Best’s Capital Adequacy Ratio (BCAR) across all return periods in standard scenarios.
Surplus has grown organically through the company’s strong operational results, generating profits in all but one year during the past 10-year period.
“The company’s strong operating performance reflects its positive underwriting results over the past five years, driven by favourable pure loss ratios, improvements to claims handling, and favourable loss adjustment expenses compared with the industry average,” AM Best said.