Insurance company

AM Best assigns credit ratings to Element Insurance Company

OLDWICK, NJ–(BUSINESS WIRE)–AM Best assigned a financial strength rating of B+ (good) and a long-term credit rating of “bbb-” (good) to Element Insurance Company (Element) (West Chester, OH). The outlook attributed to these Credit Ratings (ratings) is stable.

The ratings reflect Element’s balance sheet strength, which AM Best assesses as adequate, as well as adequate operating performance, very limited business profile and adequate enterprise risk management (ERM).

Element is a newly formed insurer focused on commercial automotive business in Ohio. The company provides commercial coverage for physical damage to motor vehicles and inland marine for the trucking industry.

The proper assessment of Element’s balance sheet strength is based on the company’s highest level of risk-adjusted capitalization, as measured by Best’s capital adequacy ratio (BCAR), and a portfolio of conservative investment, while also acknowledging its limited financial flexibility as a private stock company. AM Best expects Element to maintain favorable risk-adjusted capital levels throughout its start-up phase based on the company’s projections. AM Best assesses Element’s operating performance as adequate based on its clearly defined conservative business plan and projections which consider a level of execution risk for a newly created entity. AM Best views Element’s business profile as very limited, given the small scale and scope of operations, as well as the significant execution risk associated with a start-up entity and the high degree of competition in the market for the commercial car. AM Best considers the company’s ERM capabilities to be appropriate for the scale and scope of operations, and appropriately aligned with its stated risk profile.

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