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AM Best, a U.S.-based credit rating agency headquartered in Oldwick, New Jersey that focuses on the insurance industry has reaffirmed the stable outlook and reaffirmed the financial strength rating of B+ (good) and the long-term issuer credit rating of “bbb-” of Elan Insurance USVI, Inc.
In a recently issued release, Elan said these credit ratings reflect its balance sheet strength, which AM Best categorizes as strong, as well as its adequate operating performance, limited business profile and marginal enterprise risk management (ERM).
The company said the outlooks to stable reflects the improvement in its level of risk-adjusted capitalization in 2019 and 2020, as measured by Best’s Capital Adequacy Ratio (BCAR), and was driven by favorable earnings, repayment of an outstanding note and a capital contribution from its majority shareholder. Additionally, positive rating factors include Elan’s trend of favorable gains in enrollment and premium growth resulting in improved operating performance, according to the release.
The company has also managed to improve results by lowering its cost structure, with its administrative loss ratio measures having declined substantially. Elan’s ERM program has been evolving as the company implements its formalized program, stated the release.
Elan said it has identified its risks and provided a plan to manage and mitigate those risks. Elan’s board of directors has oversight over its risk management strategies.
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