AM Best has revised the outlooks to positive from stable and affirmed the Financial Strength Rating (FSR) of A- (Excellent) and the Long-Term Issuer Credit Rating (Long Term ICR) of “a-” (Excellent) of Landcar Casualty Company (Landcar) (Sandy, UT).
The ratings reflect Landcar’s balance sheet strength, which AM Best assesses as very strong, as well as its adequate operating performance, neutral business profile and appropriate enterprise risk management.
The outlook revisions to positive reflect the company’s improvement in underwriting and operating performance in recent years, driven by management’s corrective actions to improve its Guaranteed Asset Protection (GAP) line of business. Landcar’s operating performance is expected to remain favorable in the near term while managing its strategic initiatives to slowly expand its books of business into additional states and dealerships following its recent acquisition by Asbury Automotive Group, Inc. (Asbury) [NYSE: ABG]. Furthermore, AM Best expects that Landcar will maintain its balance sheet strength at the very strong level supported by its strongest risk-adjusted capitalization, as measured by Best’s Capital Adequacy Ratio (BCAR), and sustain growth in policyholder surplus bolstered by retained earnings.
Landcar benefits from its niche business profile as a writer of auto-related insurance products through a network of affiliated automotive dealerships as a part of the Asbury group. AM Best will continue to monitor the company’s expansion as Landcar is exposed to execution risk with its growth strategy.
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