The ratings of Ardellis reflect its conservative underwriting leverage, strong level of capitalization and profitable operating results driven by its excellent underwriting performance.
Partially offsetting these positive rating factors are Ardellisí relatively high retention and limited profile as a single parent captive of Universal Forest Products Inc. (UFP). Ardellis provides coverage for general liability, auto liability, workersí compensation, property and medical stop loss. Ardellis has maintained very conservative underwriting leverage ratios as surplus has remained strong to support its business volume. The company has posted low loss and loss adjustment expense ratios, reflecting its effective risk management practices.
The ratings also recognize Ardellisí balance sheet strength and conservative underwriting leverage measures.
Although the outlook for the ratings is stable and not expected to be revised within the next 12-24 months, factors that could lead to a positive outlook and/or an upgrading of Ardellisí ratings are material and sustained improvement in its underwriting performance and capitalization. Factors that could lead to a negative outlook and/or a downgrading of the ratings are material deterioration of capital from the companyís claims, investments and/or a reduced level of capital that does not support its ratings as measured by Bestís Capital Adequacy Ratio (BCAR).
The methodology used in determining these ratings is Bestís Credit Rating Methodology, which provides a comprehensive explanation of A.M. Bestís rating process and contains the different rating criteria employed in the rating process. Bestís Credit Rating Methodology can be found at www.ambest.com/ratings/methodology.
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