AM Best Affirms Credit Ratings of Safety Insurance Group, Inc. and Key Subsidiaries

Safety has a Financial Strength Rating of A (Excellent)

AM Best has affirmed the Financial Strength Rating (FSR) of A (Excellent) and the Long-Term Issuer Credit Ratings (Long-Term ICR) of “a+” (Excellent) of Safety Insurance Company, Safety Indemnity Insurance Company, Safety Property and Casualty Insurance Company and Safety Northeast Insurance Company. Collectively these companies are referred to as Safety Group (Safety). At the same time, AM Best has affirmed the Long-Term ICR of “bbb+” (Good) of Safety Insurance Group, Inc. (Delaware) [NASDAQ/GS: SAFT], the publicly traded parent of Safety. The outlooks of these Credit Ratings (ratings) is stable. All companies are domiciled in Boston, MA, except where specified.

The ratings reflect Safety’s balance sheet strength, which AM Best assesses as very strong, as well as its strong operating performance, neutral business profile and appropriate enterprise risk management (ERM).

Safety’s balance sheet strength is supported by its strongest level of risk-adjusted capitalization, as measured by Best’s Capital Adequacy Ratio (BCAR), low underwriting leverage, sound liquidity and historically favorable loss reserve development trends. Safety also benefits from the financial flexibility afforded by its publicly traded parent, which has the ability to access capital markets. Safety’s strong level of operating performance has supported policyholder surplus growth and is the result of management’s ability to manage the market conditions in Massachusetts successfully, where the majority of its business is written.

Safety’s business profile is assessed as neutral due to its leading market position and diverse product offerings, partially offset by its geographic concentration in Massachusetts, which exposes Safety to above average economic, regulatory and legislative risks. AM Best considers Safety’s ERM as appropriate for the company’s and scope of operations. Safety is exposed to considerable catastrophe tail risk and has implemented strategies to reduce this exposure.

Source: AM Best