Massachusetts-based insurer Arbella Insurance Group has received a ratings boost by A.M. Best Co.
Best upgraded the insurer’s financial strength rating to A- (Excellent) from B++ (Good) and issuer credit ratings to “a-” from “bbb+”.
The new rating covers all of Arbella Insurance Group (Arbella) and its members — Arbella Mutual Insurance Co., majority-owned subsidiaries Arbella Protection Insurance Co., Arbella Indemnity Insurance Co., Commonwealth Reinsurance Co., Covenant Insurance Co. (based in Southbury, Conn.) and reinsured affiliate Commonwealth Mutual Insurance Co.
Best said the upgrade reflects Arbella’s surplus growth and strong risk-adjusted capitalization following its improved underwriting performance, which is due mainly to favorable loss experience and reduced underwriting leverage over the past several years.
However, Best said, Arbella maintains elevated underwriting expenses relative to its composite peers and other Massachusetts personal automobile writers, as well as substantial property catastrophe exposure, which is closely managed and mitigated through reinsurance and coverage limitations.
Arbella writes personal and commercial lines in Connecticut and Rhode Island, as well as Massachusetts, where the company is the third largest personal automobile insurer.
Source: A.M. Best