AM Best Revises Outlooks to Positive for Broome Co-operative Insurance Company

OLDWICK, N.J.–(BUSINESS WIRE)–AM Best has revised the outlooks to positive from stable and
affirmed the Financial Strength Rating of B++ (Good) and the Long-Term
Issuer Credit Rating of “bbb+” of Broome Co-operative Insurance Company
(Broome) (Vestal, NY).

The ratings reflect Broome’s balance sheet strength, which AM Best
categorizes as very strong, as well as its marginal operating
performance, limited business profile and appropriate enterprise risk
management.

The positive outlooks reflect the company’s improved operating
performance as a result of several key underwriting initiatives,
demonstrated by three consecutive years of underwriting income and the
below break-even combined ratio through 2018. Underwriting results have
been impacted historically by severe and frequent winter events in New
York, with elevated loss levels in four of the past 10 years. However,
major technological advances, a focus on cost reduction and a
re-underwritten book of business collectively have aided underwriting
performance. As a result, a pattern of stability is more established and
the underwriting and operating ratios compare similarly to the personal
property composite averages. A continuation of these favorable operating
performance trends could result in further positive rating action in
future rating cycles.

Broome’s balance sheet strength is supported by its risk-adjusted
capitalization being at the strongest level, as measured by Best’s
Capital Adequacy Ratio (BCAR), reflective of low underwriting leverage,
a high quality investment portfolio and stable loss reserving trends.
The balance sheet strength also is supported by strong liquidity
measures and consistent surplus growth. Offsetting rating factors
include limited financial flexibility and limited scale of operations.

AM Best views the company’s business profile as limited based on writing
predominantly property business and its geographical concentration in
New York, which exposes results to weather-related events, as well as
changes in the regulatory, judicial and economic environments. However,
Broome adheres to an appropriate risk management program that identifies
major risks to the organization while correlating mitigation strategies
to offset those risks. In addition, the company maintains a
comprehensive reinsurance program, including catastrophe coverage, which
helps to shield surplus and mitigate tail risk from weather events.

This press release relates to Credit Ratings that have been published
on AM 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 AM 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 AM Best press releases, please view
Guide
for Media – Proper Use of Best’s Credit Ratings and AM Best Rating
Action Press Releases
.

AM 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 © 2019 by A.M. Best Rating Services, Inc. and/or its
affiliates. ALL RIGHTS RESERVED.

Contacts

Kim Muccia
Senior Financial Analyst
+1 908
439 2200, ext. 5731

kim.muccia@ambest.com

Christopher Sharkey
Manager, Public Relations
+1
908 439 2200, ext. 5159

christopher.sharkey@ambest.com

Brian O’Larte
Director
+1 908 439 2200, ext.
5138

brian.o’larte@ambest.com

Jim Peavy
Director, Public Relations
+1 908
439 2200, ext. 5644

james.peavy@ambest.com

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