Fortegra Group Credit Ratings Upgraded Following DB Insurance Acquisition
AM Best has upgraded the credit ratings for Fortegra Group, Inc., following its acquisition by DB Insurance Co., Ltd. (DBI) in June. Specifically, AM Best raised the Financial Strength Rating (FSR) to A (Excellent) from A- (Excellent) and the Long-Term Issuer Credit Ratings (Long-Term ICRs) to “a” (Excellent) from “a-” (Excellent) for Fortegra's operating subsidiaries.
The property and casualty companies within Fortegra, known as the Fortegra P&C Group, include Lyndon Southern Insurance Company, Insurance Company of the South, Response Indemnity Company of California, Blue Ridge Indemnity Company, Fortegra Specialty Insurance Company, and Fortegra Europe Insurance Company SE. Additionally, Fortegra Belgium Insurance Company NV, Fortegra Insurance UK Ltd., and Fortegra Indemnity Insurance Company, LTD. also received upgraded ratings.
Fortegra’s life and health subsidiaries, part of the Life of the South Group, include Life of the South Insurance Company, Bankers Life Insurance Company of Louisiana, and Southern Financial Life Insurance Company. These entities saw their FSR upgraded to A (Excellent) and Long-Term ICRs elevated to “a” (Excellent).
This upward revision in ratings highlights Fortegra's strategic importance to DBI and the anticipated benefits from being part of a larger, more financially robust enterprise. With an FSR of A+ (Superior) and a Long-Term ICR of “aa-” (Superior), DBI plans to leverage Fortegra to enhance international market presence and diversify product offerings. Fortegra is poised to benefit from DBI’s extensive operational resources and financial flexibility.
The Fortegra P&C Group’s ratings are underpinned by a very strong balance sheet, substantial operating performance, and effective enterprise risk management, despite challenges like reliance on third-party reinsurance and variable loss reserves. Similarly, the Life of the South Group benefits from strong risk-adjusted capitalisation and consistent profitability, although it faces high reinsurance leverage and increased investment risk exposure.
In the European market, Fortegra Belgium Insurance Company NV and Fortegra Insurance UK Ltd. have been recognized for strong balance sheets and their contributions to growth in specialty P&C lines across Europe. Fortegra Indemnity Insurance Company, LTD. plays a critical role in intragroup reinsurance capital management, with ratings reflecting its adequate balance sheet and stable operating performance.