NEW YORK–(BUSINESS WIRE)–KBRA assigns an A- insurance financial strength rating (IFSR) to The Philadelphia Contributionship For The Insurance Of Houses From Loss By Fire, Inc. (TPC), The Philadelphia Contributionship Insurance Company, and Germantown Insurance Company. KBRA also assigns a BBB- issuer rating to The Philadelphia Contributionship Mutual Holding Company. The Outlook for all ratings is Stable.
TPC is the oldest property insurance company in the United States today. It primarily writes homeowners’ and dwelling fire insurance in Pennsylvania and New Jersey.
The rating reflects TPC’s strong risk adjusted capitalization and solid surplus growth over the past decade, resulting in conservative underwriting leverage ratios that are well below the industry average. The rating also reflects TPC’s strong management with a deep bench, consistent favorable prior year reserve development, a sound Enterprise Risk Management framework that is appropriate for the company’s size, and an investment portfolio that has historically provided favorable investment returns.
Balancing these strengths are TPC’s heightened level of investment risk, with equities comprising approximately 68% of the investment portfolio excluding cash. However, equity market volatility is partially offset by TPC’s high-quality bond portfolio and an equity portfolio that consists primarily of blue-chip stocks. Profitability metrics have been unfavorable in recent years due to excessive growth arising out of a previous expansion strategy. Management has adopted a three-year plan to reverse this trend primarily by raising rates to an adequate level and restructuring their agency distribution system, along with a variety of other initiatives.
Further information on key credit considerations, sensitivity analyses that consider what factors can affect these credit ratings and how they could lead to an upgrade or a downgrade, and ESG factors (where they are a key driver behind the change to the credit rating or rating outlook) can be found in the full rating report referenced above.
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Information on the meaning of each rating category can be located here.
Further disclosures relating to this rating action are available in the Information Disclosure Form(s) referenced above. Additional information regarding KBRA policies, methodologies, rating scales and disclosures are available at www.kbra.com.
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