AM Best Upgrades Issuer Credit Rating of First Chicago Insurance Group Members

AM Best has upgraded the Long-Term Issuer Credit Ratings (Long-Term ICRs) to “bb+” (Fair) from “bb” (Fair) and affirmed the Financial Strength Rating (FSR) of B (Fair) of First Chicago Insurance Company and United Security Insurance Company. The outlook of the Long-Term ICRs has been revised to stable from positive, while the outlook of the FSR is stable. Both companies are domiciled in Bedford Park, IL and are collectively known as First Chicago Insurance Group (First Chicago).

The Credit Ratings (ratings) reflect First Chicago’s balance sheet strength, which AM Best assesses as adequate, as well as its adequate operating performance, limited business profile and appropriate enterprise risk management (ERM).

The upgrade of the Long-Term ICRs reflects enhancements to the group’s ERM framework that include measurable risk appetite and tolerance statements, as well as the formalization of a structured program as it relates specifically to insurance operations. Management has been memorializing and enriching the ERM function diligently within its organization over the past few years.

A new ERM committee has been established to fortify the regular review of a new ERM dashboard, which tracks known risks to ensure the group remains within its appetite and to identify emerging issues proactively. A risk register was created to identify key insurance risks as it relates to underwriting, catastrophe, credit and investment risks.

First Chicago’s process includes stress testing and mitigation strategies to ensure that adequate capital is maintained to support growth initiatives. These initiatives have established an appropriate ERM program as it pertains to the group’s risk profile.

Source: AM Best

Topics
AM Best