AM Best upgrades Restoration Risk Retention Group
AM Best has upgraded the Financial Strength Rating to A (Excellent) from A- (Excellent) of Restoration Risk Retention Group, Incorporated (RRRG). The outlook of the rating has been revised to stable from positive.
The ratings reflect RRRG’s balance sheet strength, which AM Best categorizes as very strong, as well as its strong operating performance, limited business profile and appropriate enterprise risk management.
The rating agency said the upgrades reflect RRRG’s sustained improvement in its operating performance, which compares favorably with the industry averages, despite the inherent challenges that come along with being a mono-line specialty, niche insurer.
RRRG uses its quasicaptive position for ready access to more than 1,700 independent Servpro franchisees in all 50 states, and its partnership with its sponsor, Servpro Industries, Inc., in providing best practices training and loss prevention tactics to those Servpro franchisees that RRRG insures.
AB Best said: “The company has reduced its loss volatility in recent years through improvements in claims management and litigation strategies, resulting annually in favorable reserve development. The steps taken by management have improved underwriting profitability significantly, which AM Best anticipates should continue without material deviation.
“The ratings also reflect management’s prudent risk management philosophy and RRRG’s very strong balance sheet that is supported by its solid future earnings prospects, letters of credit provided by Servpro and a conservative reserving approach. RRRG management has taken additional action in recent years to reduce balance sheet exposure to equity market volatility.”