|[August 23, 2013]
A.M. Best Assigns Ratings to Physicians Insurance Program Exchange
OLDWICK, N.J. --(Business Wire)--
A.M. Best Co. has assigned a financial strength rating of B+
(Good) and an issuer credit rating of "bbb-" to Physicians Insurance
Program Exchange (PIPE) (Upper Gwynedd, PA). The outlook assigned to
both ratings is stable.
The ratings reflect PIPE's adequate capital position, good overall
record of profitability and favorable experience in providing medical
professional liability with a specialty niche orientation. Additional
factors supporting the ratings include the company's commitment to
conservative underwriting and employment of an aggressive claim handling
process, all while its stated focus is on providing quality service to
Partially offsetting these favorable rating factors are the competitive
pressures within the medical professional liability line including price
competition and loss cost trends. Also considered in the ratings is
PIPE's elevated expense ratio, significant reinsurance costs and limited
financial flexibility. In addition, the company's narrow oncentration
of business and the need for management to sustain profitability through
a planned geographic expansion may magnify the impact of these
offsetting factors. Given the relatively brief history of PIPE, A.M.
Best remains concerned with the execution of this expansion given the
operational and judicial/regulatory risks.
The assigned outlook contemplates all of the aforementioned factors and
A.M. Best's expectation of PIPE's continued profitability and management
meeting its business projections.
The ratings may be impacted negatively if, among other items, the level
of PIPE's capital and surplus deteriorates materially, reserve positions
are found to be inadequate, leverage and/or risk-adjusted capital falls
outside A.M. Best's acceptable range, or the company's actual results
deviate substantially from its projections.
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 © 2013 by A.M. Best Company, Inc. ALL RIGHTS
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