AM Best Affirms Credit Ratings of Park Assurance Company

Rhea-AI Summary

AM Best has reaffirmed the Financial Strength Rating of A (Excellent) and the Long-Term Issuer Credit Rating of “a” (Excellent) for Park Assurance Company, with a stable outlook. This rating reflects Park's very strong balance sheet strength and strong operating performance, despite a limited business profile. Park exhibits strong liquidity and conservative investment practices, consistently outperforming the commercial property composite. However, risks include credit exposure from extensive reinsurance use and reliance on the Terrorism Risk Insurance Program, vital for JPMorgan Chase's risk management strategy.

Positive

• Financial Strength Rating of A (Excellent) reaffirmed by AM Best.
• Stable outlook indicates continued financial stability.
• Strong operating performance with favorable loss ratios.
• Sophisticated risk management strategy and experienced management team.
• Benefits from JPMorgan Chase's significant financial resources.

Negative

• Limited business profile due to product concentration risk.
• Potential credit risk from reliance on reinsurance.
• Dependence on the Terrorism Risk Insurance Program.

OLDWICK, N.J.--(BUSINESS WIRE)-- AM Best has affirmed the Financial Strength Rating of A (Excellent) and the Long-Term Issuer Credit Rating of “a” (Excellent) of Park Assurance Company (Park) (Colchester, VT). The outlook of these Credit Ratings (ratings) is stable.

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

Park’s strongest level of risk-adjusted capitalization, as measured by Best’s Capital Adequacy Ratio (BCAR), reflects its conservative loss reserving practices and favorable development trends, along with its conservative investment portfolio and strong liquidity measures. Park is well-capitalized through retained earnings, as the captive has reported consistently favorable pure loss ratios in combination with its low-cost underwriting expense structure to produce favorable operating earnings year after year, which have outperformed the commercial property composite by a wide margin. The ratings further reflect Park’s sophisticated risk management strategy and practices, experienced management team and its integral role as a single-parent captive of JPMorgan Chase Holdings LLC, which is a subsidiary of JPMorgan Chase & Co. (JPMorgan Chase) [NYSE: JPM], a leading global financial services group; however, Park’s business profile is considered limited due to its product concentration risk, offering limited lines of coverage on a net basis.

Partially offsetting these factors are the potential credit risk associated with Park’s extensive use of reinsurance, which management utilizes to mitigate its exposure to oversized losses on substantially valued insured locations, as well as its reliance on the protection afforded by the Terrorism Risk Insurance Program Reauthorization Act. Park provides JPMorgan Chase with global property coverages, including terrorism, cyber and bankers blanket bond. These coverages are key components of JPMorgan Chase’s risk management strategy, and Park benefits from the explicit support of the group’s significant financial resources and extensive professional resources.

AM Best remains the leading rating agency of alternative risk transfer entities, with more than 200 such vehicles rated in the United States and throughout the world. For current Best’s Credit Ratings and independent data on the captive and alternative risk transfer insurance market, please visit www.ambest.com/captive.

This press release relates to Credit Ratings that have been published on AM Best’s website. For all rating information relating to the release and pertinent disclosures, including details of the office responsible for issuing each of the individual ratings referenced in this release, please see AM Best’s Recent Rating Activity web page. For additional information regarding the use and limitations of Credit Rating opinions, please view Guide to Best's Credit Ratings. For information on the proper use of Best’s Credit Ratings, Best’s Performance Assessments, Best’s Preliminary Credit Assessments and AM Best press releases, please view Guide to Proper Use of Best’s Ratings & Assessments.

AM Best is a global credit rating agency, news publisher and data analytics provider specializing in the insurance industry. Headquartered in the United States, the company does business in over 100 countries with regional offices in London, Amsterdam, Dubai, Hong Kong, Singapore and Mexico City. For more information, visit www.ambest.com.

Copyright © 2023 by A.M. Best Rating Services, Inc. and/or its affiliates. ALL RIGHTS RESERVED.

View source version on businesswire.com: https://www.businesswire.com/news/home/20230224005294/en/

Fred Eslami

Associate Director

+1 908 439 2200, ext. 5406

fred.eslami@ambest.com



Dan Teclaw

Director

+1 908 439 2200, ext. 5394

dan.teclaw@ambest.com



Christopher Sharkey

Manager, Public Relations

+1 908 439 2200, ext. 5159

christopher.sharkey@ambest.com



Al Slavin

Senior Public Relations Specialist

+1 908 439 2200, ext. 5098

al.slavin@ambest.com

Source: AM Best

FAQ

What is the current Financial Strength Rating of Park Assurance Company (JPM)?

AM Best has affirmed the Financial Strength Rating of A (Excellent) for Park Assurance Company.

How does AM Best rate Park Assurance Company?

AM Best has issued a Long-Term Issuer Credit Rating of 'a' (Excellent) for Park Assurance Company.

What is the outlook of Park Assurance Company's ratings?

The outlook for Park Assurance Company's ratings is stable.

What factors contribute to Park Assurance Company's ratings?

Park Assurance Company's ratings reflect its very strong balance sheet strength and strong operating performance.

What are the risks associated with Park Assurance Company (JPM)?

Risks include product concentration risk and potential credit exposure from reinsurance reliance.