A.M. Best Says ClearPath Credit Ratings Stable

Thursday, February 28, 2019 | 0

A.M. Best assigned a financial strength rating of “A-" (excellent) and a long-term issuer credit rating of “a-” to ClearPath Mutual Insurance Co., and the outlook assigned to the ratings for the Kentucky-based carrier is stable.

The ratings reflect ClearPath’s balance sheet strength, which A.M. Best categorized in a statement as very strong. The global rating agency also said ClearPath’s risk-adjusted capitalization, as measured by Best’s Capital Adequacy Ratio, is categorized as strongest and not expected to change.

The balance sheet strength assessment also considers the company’s above-average reserve leverage, conservative approach to establishing reserves, history of favorable reserve development and generally low risk investment portfolio, A.M. Best said.

“ClearPath has generated an adequate level of operating performance, supported by favorable underwriting income and moderate investment returns in recent years,” A.M. Best said. “Underwriting results have benefited from favorable reserve development trends on prior accident years.”

A.M. Best cited a possible concern that as a single-state, monoline workers’ compensation carrier, ClearPath is susceptible to both competitive pressures in Kentucky, as well as potential legislative, regulatory or judicial changes.

“This concern is mitigated partly by the company’s favorable market position within the state and local market expertise,” A.M. Best said.