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AM Best Revises Outlooks to Stable for Topa Insurance Company and Dorchester Insurance Company, Ltd.AM Best has revised the outlooks to stable from negative and affirmed the Financial Strength Rating of A- (Excellent) and the Long-Term Issuer Credit Ratings of "a-" (Excellent) of Topa Insurance Company (Calabasas, CA (News - Alert)) and its subsidiary, Dorchester Insurance Company, Ltd. (U.S. Virgin Islands). These companies, which collectively are referred to as Topa Insurance Group (Topa), are wholly owned subsidiaries of Topa Equities, Ltd. These Credit Ratings (ratings) reflect Topa's balance sheet strength, which AM Best assesses as very strong, as well as its adequate operating performance, limited business profile and appropriate enterprise risk management (ERM). The ratings consider Topa's very strong balance sheet strength, inclusive of an adverse development cover (ADC (News - Alert)) that has provided a level of protection against adverse reserve development on the entire base of accident-year 2018 and prior loss reserves; adequate operating performance, evidenced in part by profitability on a five-year average basis; and limited business profile as a specialty writer focused primarily on commercial lines and niche market program business. The revision of the outlooks to stable reflects AM Best's expectation that Topa will maintain its improved level of operating performance on continuing business over the intermediate term, which will help to absorb the potential for further adverse development in the commercial auto liability line, while continuing to benefit from expense controls and increased operating efficiencies from the upgrade of core systems. The outlook revisions further reflects a number of strategic business initiatives and underwriting actions taken by management in ecent years to improve profitability, which include purchasing the ADC, effective Jan. 1, 2019, exiting underperforming business and undesirable classes, implementing rate increases where appropriate, aggressively managing tail risk and building business in core programs. AM Best will continue to monitor the overall impact of these initiatives on Topa's balance sheet strength, operating performance, business profile and ERM. This press release relates to Credit Ratings that have been published on AM Best's website. For all rating information relating to the release and pertinent disclosures, including details of the office responsible for issuing each of the individual ratings referenced in this release, please see AM Best's Recent Rating Activity web page. For additional information regarding the use and limitations of Credit Rating opinions, please view Guide to Best's Credit Ratings. For information on the proper media use of Best's Credit Ratings and AM Best press releases, please view Guide for Media - Proper Use of Best's Credit Ratings and AM Best Rating Action Press Releases. AM Best is a global credit rating agency, news publisher and data analytics provider specializing in the insurance industry. Headquartered in the United States, the company does business in over 100 countries with regional offices in London, Amsterdam, Dubai, Hong Kong, Singapore and Mexico City. For more information, visit www.ambest.com. Copyright © 2021 by A.M. Best Rating Services, Inc. and/or its affiliates. ALL RIGHTS RESERVED.
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