OLDWICK, New Jersey – (COMMERCIAL THREAD) –AM Best has assigned a financial strength rating of A- (excellent) and a long-term issuer credit rating of “a-” (excellent) to First Indemnity of America Insurance Company (FIAIC) (Morris Plains, NJ). The outlook assigned to credit ratings (ratings) is stable.
The ratings reflect the strength of First Indemnity’s balance sheet, which AM Best considers to be very strong, as well as its adequate operational performance, limited business profile and appropriate management of business risks.
FIAIC is a niche provider focused on underwriting surety bonds for small and medium-sized contractors in industries such as construction, paving, landscaping and other similar industries. The company operates through long-term partnerships with producers, primarily in the northeastern states, with a concentration of risk in New Jersey and Maryland. The strength of FIAIC’s balance sheet is supported by the company’s highest level of risk-adjusted capitalization, as measured by the Best Solvency Ratio (BCAR). The balance sheet strength assessment takes into account the prudent reserve and strong reinsurance program of the company, while also recognizing limited financial flexibility and a high level of leverage on common stocks.
FIAIC has shown consistent operating profitability over the past five years, with positive revenues resulting from both underwriting transactions and returns on investment. While underwriting expenses have been high relative to the composite numbers, management is confident that these expenses translate into quality business on their books. The company’s risk management capabilities are considered appropriate and aligned with its stated risk profile.
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