AM Best affirmed the issuer’s financial strength rating of A- (Excellent) and the issuer’s long-term credit rating of “a-” (Excellent) from
The ratings reflect Constitution’s balance sheet strength, which AM Best assesses as very strong, as well as adequate operating performance, limited business profile and adequate enterprise risk management (ERM).
The changing business profile of Constitution has caused volatility in performance measures over the past several years, but these have largely moved in a favorable direction as operations stabilize. This can be seen in the combined ratio, which increased from 211% in 2017 to 88.1% in 2021. Previous unfavorable combined ratios were mainly due to low premium volumes, as the company transitioned to its business plan current.
Constitution’s business profile maintains certain geographic and product concentrations, although the assumed quota-sharing contracts from a related party have alleviated concerns to some extent as they have increased diversification and improved overall performance.
Constitution’s ERM practices are tailored to its size and scope. Risk management is a central point for management and the company is well aware of the risks that affect its markets. The company maintains well-established conservative underwriting guidelines which have been profitable in the past.
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Source: AM Best