OLDWICK, New Jersey – (COMMERCIAL THREAD) –AM Best revised the outlook from stable to positive and confirmed the financial strength rating of B + (good) and the issuer’s long-term credit rating of “bbb-” (good) of Aspire General Insurance Company (Aspire General ) (Rancho Cucamonga, CA).
These credit ratings (ratings) reflect the strength of Aspire General’s balance sheet, which AM Best believes to be adequate, as well as its marginal operating performance, limited business profile and proper management of business risk.
The revised outlook from stable to positive reflects the improvement in Aspire General’s underwriting and operating performance in recent years starting in 2018, in large part due to management’s many initiatives to improve profitability, namely the termination of agencies with excessive loss ratios and the implementation of rate increases. In addition, the company is technologically advanced for its size and uses predictive analytics in its decision-making process with a strong emphasis on loss frequency management. In addition, data analysis and point-of-sale tools are used to target profitable segments and react quickly to new pricing needs of companies. Finally, the property has contributed to Aspire General’s capital in recent years to support the growth of new businesses in order to alleviate surpluses.
Aspire General’s above-average underwriting leverage, limited scale of operations and heavy reliance on reinsurance partially offsets the positive factors. The high underwriting leverage was affected by significant direct subscriptions driven by the growth of policies and the implementation of rate increases on its Savings and Advantage products. However, the property has made capital contributions in recent years to support the company’s growth plans. In addition, the company’s excess growth has been consistent over the past several years, primarily due to profitable operating results. Overall, the company faces some challenges in today’s California environment for non-standard auto lines, due to economic conditions, significant price competition, and an unfavorable selection of top writers. personal automobiles with greater scale and granularity in pricing. However, the company relies on its experienced management team and highly rated reinsurers to manage its risks and stay profitable.
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