AM Best Affirms Credit Ratings of The Fortegra Group, Inc.’s Insurance Subsidiaries

AM Best has affirmed the Financial Strength Rating (FSR) of A- (Excellent) and the Long-Term Issuer Credit Ratings (Long-Term ICRs) of “a-” (Excellent) of the operating subsidiaries of The Fortegra Group, Inc. (Fortegra) (headquartered in Jacksonville, FL). Fortegra is a wholly owned subsidiary of its publicly traded parent company, Tiptree Inc. [NASDAQ: TIPT]. The property/casualty (P/C) operating subsidiaries of Fortegra include: Lyndon Southern Insurance Company (Wilmington, DE); Insurance Company of the South (Athens, GA); Response Indemnity Company of California (Redondo Beach, CA); Blue Ridge Indemnity Company (Wilmington, DE); Fortegra Specialty Insurance Company (Fortegra Specialty) (Scottsdale, AZ); and Fortegra Europe Insurance Company Limited (FEI) (Malta). These companies are collectively referred to as Fortegra P&C Group (the P/C group).

In addition, AM Best has affirmed the FSR of A- (Excellent) and the Long-Term ICR of “a-” (Excellent) of Fortegra’s life/health operating subsidiaries, which include: Life of the South Insurance Company (Athens, GA); Bankers Life Insurance Company of Louisiana (Marksville, LA); and Southern Financial Life Insurance Company (Scottsville, KY). These companies are collectively referred to as Life of the South Group (the life group). The outlook of these Credit Ratings (ratings) is stable.

Concurrently, AM Best has affirmed the FSR of A- (Excellent) and the Long-Term ICR of “a-” (Excellent) of Fortegra Indemnity Insurance Company, LTD. (Fortegra Indemnity) (Turks and Caicos). The outlook of these ratings is stable.

The ratings of Fortegra P&C Group reflect its 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 (ERM).

Fortegra P/C Group’s balance sheet strength assessment is based on its strongest level of risk-adjusted capitalization, as measured by Best’s Capital Adequacy Ratio (BCAR), its prudent investment portfolio, solid liquidity measures that are enhanced by positive underwriting and operating cash flows, and comprehensive reinsurance program. Partially offsetting these positive rating factors is the company’s substantial reliance on third-party reinsurance to provide capacity, which is demonstrated by high ceded underwriting leverage that is somewhat mitigated by the use of collateral, as well as its modest loss reserve volatility. The P/C group’s capital and surplus has shown strong, long-term growth through retained earnings, partially offset by modest dividends to the parent holding company.