|[September 04, 2014]
A.M. Best Assigns Ratings to Greenpath Insurance Company
OLDWICK, N.J. --(Business Wire)--
A.M. Best has assigned a financial strength rating (FSR) of B+
(Good) and an issuer credit rating (ICR) of "bbb-" to Greenpath
Insurance Company (Greenpath) (Rancho Cordova, CA (News - Alert)). The outlook
assigned to both ratings is stable.
The ratings and outlook reflect Greenpath's sound business plan, solid
risk-adjusted capitalization and in-depth knowledge of California's
private passenger non-standard automobile market. Partially offsetting
these positive rating factors are the company's limited product and
geographic focus and execution risk as a new company attempting to gain
market share and expand its geographic presence.
Greenpath maintains solid risk-adjusted capitalization due to its
relatively conservative underwriting and investment leverage measures.
In addition, the company benefits from senior management's successful
track record in California's private passenger non-standard automobile
market. Greenpath's management has successfully overseen profitable
automobile insurance products and sold in the California and national
marketplace for many years. Furthermore, the company is technologically
advanced and utilizes predictive analytics as a road map for decision
making with a heavy emphasis on managing loss frequency. Data warehouse
design provides for multivariate dta review, analysis and pricing of
Partially offsetting these positive ratings factors is the execution
risk associated with growing a private passenger non-standard automobile
book of business, a segment in which smaller insurance writers have
experienced a material deterioration in operating results and surplus in
recent years. This deterioration has been driven by economic conditions,
significant price competition and adverse selection from large personal
automobile writers with greater scale and pricing granularity. However,
Greenpath management's history of solid performance in the private
passenger non-standard automobile market somewhat mitigates the
associated execution risk.
While A.M. Best believes Greenpath's ratings and outlook are well
positioned at current levels, factors that may lead to positive rating
actions include a trend of positive operating and underwriting
profitability that outperforms A.M. Best's private passenger
non-standard auto composite, while enhancing capitalization through
organic surplus growth. Factors that could lead to negative rating
actions include a material deviation from management's projections, a
lack of underwriting discipline that deteriorates its underwriting and
operating performance to a level below its peers or an erosion of
surplus that causes a significant decline in risk-adjusted
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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