AM Best assigns credit ratings to Palmetto Corporation Surety
OLDWICK, NJ–(BUSINESS WIRE)–AM Best assigned a Financial Strength Rating of B (Fair) and Long-Term Issuer Credit Rating “bb+” (Fair) to Palmetto Surety Corporation (Palmetto) (Mount Pleasant, SC). The outlook assigned to these credit ratings (votes) is stable.
The ratings reflect the balance sheet strength of Palmetto, AM Best evaluates as appropriate, as well as its adequate operating performance, limited business profile and appropriate management of business risks (GRE).
Palmetto is a single-line surety writer whose primary business is providing cove bail through its agents. The company has also taken out commercial surety and contract surety. Palmetto operates in eight states, primarily located in the southeast, and intends to expand its geographic footprint by expanding into additional states.
Evaluations of Palmetto reflect the highest level of risk-adjusted capitalization as measured by Best Capital Adequacy Ratio (BCAR), supported by a conservative investment portfolio and favorable prior year loss reserves . These compensating factors Positive Rating is the heavy use of surplus notes, which has a negative impact on the quality of capital and the effect of high leverage to the parent of Palmetto, United Group Holding, LLC. The ratings also reflect the proper subscription Palmetto and operating results in the recent five-year period, which benefited from the company’s guiding principles of underwriting and investments ESTABLISHED its software platform bail surety . limited business profile Palmetto reflects its narrow product orientation and geographic concentration in the Southeast, which exposes the company to potential legal or regulatory challenges. AM Best believes the Palmetto ERM program is appropriate for its size and scope of operations.
The stable outlook reflects the expectation that AM Best Palmetto maintain adequate strength of the medium-term balance sheet with adequate results of operations contributing to the growth of the surplus.
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