|[March 12, 2014]
A.M. Best Assigns Ratings to Palomar Specialty Insurance Company
OLDWICK, N.J. --(Business Wire)--
A.M. Best has assigned a financial strength rating of A-
(Excellent) and an issuer credit rating of "a-" to Palomar Specialty
Insurance Company (Palomar Specialty) (La Jolla, CA (News - Alert)). The outlook
assigned to both ratings is stable.
The ratings for Palomar Specialty are based on its favorable
risk-adjusted capital position, following its recent commencement of
business in the residential and commercial earthquake markets. The
ratings also consider the company's experienced management team, which
is familiar with the risks and the region in which it operates.
Furthermore, management is committed to capital growth, a
well-diversified investment portfolio and a focus on its long-term
These strengths are partially offset by Palomar Specialty's geographic
concentration of business in catastrophe-prone areas and significant
reinsurance dependence. However, through its catastrophe mitigation
strategis and a comprehensive reinsurance program, Palomar Specialty
has reduced its net catastrophe leverage to a manageable level. The
outlook is based on A.M. Best's expectation that the company will
maintain its solid capitalization as premium levels increase over time.
Although the outlook for Palomar Specialty's ratings is stable and the
ratings are not expected to be upgraded nor its outlook revised within
the next 12-24 months, A.M. Best could downgrade the ratings and/or
revise the outlook if the company's capital position declines
materially, its operating performance and risk profile deteriorate or
losses from claims and/or investments erode capital.
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.
A.M. Best Company is the world's oldest and most authoritative
insurance rating and information source. For more information, visit www.ambest.com.
Copyright © 2014 by A.M. Best Company, Inc. ALL RIGHTS
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