The ratings of THIE are reflective of its supportive risk-adjusted capitalization, operating profitability and judicious reserving practices. These positive rating factors are partially offset by THIE's narrow geographic spread of risk, highly competitive operating environment and elevated expense ratio levels. The outlook is based on the company’s prospects of continued operating profitability through price and reserve adequacy while maintaining supportive capital.
The ratings also acknowledge THIE's business focus as it provides commercial insurance products to small and rural
However, the company writes only in
Factors that could lead to positive rating actions include sustained favorable performance on an underwriting and operating basis, consistent generation of surplus and the maintenance of strong capitalization. Negative rating actions could occur if risk-adjusted capitalization decreases or should a trend of unfavorable earnings from underwriting or investment losses develop.
The methodology used in determining these ratings is Best’s Credit Rating Methodology, which provides a comprehensive explanation of A.M. Best’s rating process and contains the different rating criteria employed in the rating process. Best’s Credit Rating Methodology can be found at www.ambest.com/ratings/methodology.
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