AM Best Affirms Credit Ratings of Safety Insurance Group, Inc. and Key Subsidiaries; Assigns Credit Ratings to Safety Northeast Insurance Company

AM Best has affirmed the Financial Strength Rating (FSR) of A (Excellent) and the Long-Term Issuer Credit Ratings (Long-Term ICR) of “a+” (Excellent) of Safety Insurance Company, Safety Indemnity Insurance Company and Safety Property and Casualty Insurance Company. The outlook of these Credit Ratings (ratings) is stable. Concurrently, AM Best has assigned an FSR of A (Excellent) and a Long-Term ICR of “a+” (Excellent) to Safety Northeast Insurance Company (Safety Northeast). The outlook assigned to these ratings is stable. Collectively, along with Safety Northeast, these companies are referred to as Safety Group (Safety). At the same time, AM Best has affirmed the Long-Term ICR of “bbb+” (Good) of Safety Insurance Group, Inc. (Delaware) [NASDAQ/GS: SAFT], the publicly traded parent of Safety. The outlook of these ratings is stable. All companies are domiciled in Boston, MA, except where specified.

The ratings reflect Safety’s balance sheet strength, which AM Best assesses as very strong, as well as its strong operating performance, neutral business profile and appropriate enterprise risk management (ERM).

Safety’s very strong balance sheet strength is derived from low underwriting leverage measures, sound liquidity measures and historically favorable reserve development trends. In addition, Safety benefits from the financial flexibility afforded by its publicly traded parent, which has the ability to access capital markets. Safety’s strong operating performance is derived from consistently profitable underwriting results and solid investment income. The strong profitability has supported policyholder surplus growth and is the result of management’s ability to manage the challenges in Massachusetts successfully, where Safety writes the majority of its business.

AM Best assesses Safety’s business profile as neutral due to its leading market position and diverse product offerings, partially offset by its geographic concentration in Massachusetts, which exposes Safety to above average economic, regulatory and legislative risks. AM Best considers Safety’s ERM as appropriate for the company’s size and scope of operations; however, Safety is exposed to considerable catastrophe tail risk and has implemented strategies to reduce this exposure.

The ratings also reflect the addition of Safety Northeast to the group’s intercompany reinsurance pooling agreement. Safety Northeast is expected to begin writing homeowners risks that satisfy stricter guidelines in the fourth quarter of 2021.

This press release relates to Credit Ratings that have been published on AM Best’s website. For all rating information relating to the release and pertinent disclosures, including details of the office responsible for issuing each of the individual ratings referenced in this release, please see AM Best’s Recent Rating Activity web page. For additional information regarding the use and limitations of Credit Rating opinions, please view Guide to Best’s Credit Ratings. For information on the proper media use of Best’s Credit Ratings and AM Best press releases, please view Guide for Media - Proper Use of Best’s Credit Ratings and AM Best Rating Action Press Releases.

AM Best is a global credit rating agency, news publisher and data analytics provider specializing in the insurance industry. Headquartered in the United States, the company does business in over 100 countries with regional offices in London, Amsterdam, Dubai, Hong Kong, Singapore and Mexico City. For more information, visit www.ambest.com.

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