AM Best has upgraded the Long-Term Issuer Credit Ratings (Long-Term ICRs) from “bb” (Fair) to “bb+” (Fair) and affirmed the Financial Strength Ratings (FSR) of B (Fair) of First Chicago Insurance Company and United Security Insurance Company. The outlook for long-term ICRs has been revised from positive to stable, while the outlook for FSR is stable. Both companies are based in Bedford Park, IL and are collectively known as First Chicago Insurance Group (First Chicago).
The credit ratings (ratings) reflect the strength of First Chicago’s balance sheet, which AM best assesses, as well as its adequate operating performance, limited business profile and appropriate enterprise risk management (ERM).
The upgrade to long-term ICRs reflects enhancements to the group’s ERM framework, including risk measurement and tolerance statements, as well as the formalization of a structured program as it relates specifically to insurance operations. Management has been making the ERM function memorable and enriching within their organization for the past few years.
A new ERM committee has been established to strengthen the regular review of a new ERM dashboard, which tracks known risks to ensure the group stays within its appetite and proactively identifies emerging issues. A risk register was created to identify key insurance risks as it relates to underwriting, catastrophe, credit and investment risks.
Chicago’s first process includes stress testing and mitigation strategies to ensure adequate capital is maintained to support growth initiatives. These initiatives have established an appropriate ERM program as it relates to the Group’s risk profile.
Source: AM Best
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