Ratings Roundup: Jefferson; Southern Guaranty; Professionals Direct

A.M. Best Co. has assigned a financial strength rating of “A” (Excellent) and an issuer credit rating of “a+” to New York-based Jefferson Insurance Company. The outlook is stable, in line with that of the parent company, Elvia Reiseversicherungs-Gesellschaft AG, and “reflect the full rating enhancement from the explicit support in the form of a 90 percent quota share reinsurance agreement with Elvia,” said Best. The rating agency explained that “Elvia acquired Jefferson from Allianz Global Risks US Insurance Company on April 1, 2007 to front the U.S. travel insurance business (mainly trip cancellation business), previously fronted by BCS Insurance Company and ceded to Elvia.” Best said it “expects the newly acquired subsidiary to generate gross premiums written of approximately $25 million in 2007, rising to approximately $75-100 million in 2008 once the existing fronting arrangement has been phased out.”

A.M. Best Co. has withdrawn the financial strength rating (FSR) of “A-” (Excellent) and the issuer credit rating (ICR) of “a-” of Southern Guaranty Insurance Company of Georgia, a former member of the Winterthur US Group. The rating action reflects the sale of the “company having been sold as a ‘shell.’ All of Southern Guaranty of Georgia’s in force business at the time of the sale was reinsured 100 percent by General Casualty of Wisconsin. Southern Guaranty of Georgia will continue to write business on behalf of the General Casualty Companies for a period up to and including August 1, 2007.”

A.M. Best Co. has affirmed the financial strength rating (FSR) of “A-” (Excellent) and assigned an issuer credit rating (ICR) of “a-” to Professionals Direct Insurance Company (PDIC) of Grand Rapids, Mich. Best also assigned an ICR of “bbb-” to PDIC’s parent holding company, Professionals Direct, Inc. The outlook for all the ratings is stable. “These ratings reflect PDIC’s supportive capitalization, geographical spread of risk and satisfactory operating performance, said Best. “As a result of PDIC’s geographic expansion in 2002 and 2003, the company is now active in 32 states, thereby reducing its dependence on Michigan, which now accounts for approximately one-third of direct premiums written.”