A.M. Best Affirms Ratings of Palisades Group; Assigns Ratings to the High Point Group.Business Editors OLDWICK, N.J--(BUSINESS WIRE)--Nov. 6, 2003 A.M. Best Co. has affirmed af·firm v. af·firmed, af·firm·ing, af·firms v.tr. 1. To declare positively or firmly; maintain to be true. 2. To support or uphold the validity of; confirm. v.intr. the financial strength ratings of B++ (Very Good) of Palisades Palisades, cliffs along the west bank of the Hudson River, NE N.J. and SE N.Y., extending from N of Jersey City, N.J., to the vicinity of Piermont, N.Y., with a general altitude of from 350 ft to 550 ft (107–168 m). Group (Berkeley Heights, NJ) and removed it from under review. Additionally, A.M. Best has assigned initial financial strength ratings of B++ (Very Good) to the High Point Group (Holmdel, NJ). High Point Group was formerly the Prudential Property and Casualty New Jersey Group, which had a financial strength rating of A- (Excellent) prior to the removal of the under review status. The rating outlooks are stable. These rating actions follow the November 1, 2003, purchase of High Point by the lead company of the Palisades Group, Palisades Safety and Insurance Association (New Jersey), from Prudential Financial Inc. The affirmation A solemn and formal declaration of the truth of a statement, such as an Affidavit or the actual or prospective testimony of a witness or a party that takes the place of an oath. An affirmation is also used when a person cannot take an oath because of religious convictions. of Palisades' ratings reflects its sustained earnings in recent years and maintenance of solid capitalization capitalization n. 1) the act of counting anticipated earnings and expenses as capital assets (property, equipment, fixtures) for accounting purposes. 2) the amount of anticipated net earnings which hypothetically can be used for conversion into capital assets. through a period of significant growth derived primarily from renewal rights transactions. Operating earnings Operating Earnings Profits after subtracting expenses such as marketing, cost of goods sold, administration and general operating costs from revenue. Notes: Tax and interest expenses are not subtracted - operating earnings are synonymous with EBIT (earnings before have been influenced by the group's focused operating strategy, knowledge of local market conditions and income received in conjunction with assuming New Jersey personal auto business from carriers exiting the market. The ratings also recognize Palisades' high business persistency, strict underwriting Underwriting 1. The process by which investment bankers raise investment capital from investors on behalf of corporations and governments that are issuing securities (both equity and debt). 2. The process of issuing insurance policies. and claim practices and investments in technology to enhance operating efficiencies. Negative rating factors include the group's high underwriting leverage and business concentration in New Jersey, which has historically been a difficult operating environment In computing, an operating environment is the environment in which users run programs, whether in a command line interface, such as in MS-DOS or the Unix shell, or in a graphical user interface, such as in the Macintosh operating system. due to heavy consumer and regulatory pressures. Furthermore, High Point will operate as a separate organization with its current infrastructure largely intact. The magnitude of the transaction results in the combination of Palisades and High Point becoming one of the leading personal automobile providers as measured by net premium written in New Jersey. The High Point ratings reflect the diminished di·min·ish v. di·min·ished, di·min·ish·ing, di·min·ish·es v.tr. 1. a. To make smaller or less or to cause to appear so. b. capitalization driven by the return of capital to the former owner as part of the transaction. In addition, the group faces some integration risk in its operations, although the majority of staff, distribution sources and information systems remain intact. While the capital position of High Point has declined from levels prior to the sale, it is supportive of the current rating level. Moreover, High Point has historically produced favorable fa·vor·a·ble adj. 1. Advantageous; helpful: favorable winds. 2. Encouraging; propitious: a favorable diagnosis. 3. earnings reflective of its local market expertise and adherence adherence /ad·her·ence/ (ad-her´ens) the act or condition of sticking to something. immune adherence to sound underwriting fundamentals through a private passenger automobile multi-company and multi-tiered rating system. Earnings have benefited from increased homeowners' rate levels, improved claims handling procedures and risk mitigation MITIGATION. To make less rigorous or penal. 2. Crimes are frequently committed under circumstances which are not justifiable nor excusable, yet they show that the offender has been greatly tempted; as, for example, when a starving man steals bread to satisfy initiatives. The stable rating outlooks assigned to both Palisades and High Point are reflective of A.M. Best's expectations of solid earnings and the maintenance of capitalization that is supportive of the current ratings. A.M. Best has also affirmed the financial strength rating of B+ (Very Good) of Palisades Insurance Company (New Jersey), a subsidiary of Palisades Safety and Insurance Association. The financial strength ratings of B++ (Very Good) have been affirmed for the Palisades Group and the following member: Palisades Safety and Insurance Association The financial strength ratings of B++ (Very Good) have been assigned to the High Point Group and the following members: -- High Point Preferred Insurance Company (formerly Prudential Property and Casualty Insurance Company of NJ) -- High Point Property and Casualty Insurance Company (formerly Prudential General Insurance Company) -- High Point Safety and Insurance Company (formerly Prudential Commercial Insurance Company) A.M. Best Co., established in 1899, is the world's oldest and most authoritative insurance rating and information source. For more information, visit A.M. Best's Web site at www.ambest.com. |
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