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  • Professor Andrea M. Armani, University of Southern California
  • Ruti Ben-Shlomi, Ph.D., LightSolver
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  • Professor Birgit Stiller, Max Planck Institute for the Science of Light, and Leibniz University of Hannover
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  • Mohan Wang, Ph.D., University of Oxford
  • Professor Xuchen Wang, Harbin Engineering University
  • Professor Stefan Witte, Delft University of Technology

AM Best Revises Outlooks to Positive for Lone Peak Insurance Company

AM Best has revised the outlooks to positive from stable and affirmed the Financial Strength Rating of B++ (Good) and the Long-Term Issuer Credit Rating of “bbb+” (Good) of Lone Peak Insurance Company (Lone Peak) (South Jordan, UT).

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

Also, the revised outlooks reflect Lone Peak’s exceptional underwriting performance and operating profitability relative to its peers in the auto warranty segment. The favorable results can be attributed to the company’s business model of being a writer of failure-to-perform contract liability insurance policies (CLIP), which ultimately carry minimal risk for the insurer. Under the failure-to-perform CLIP, Lone Peak is obligated to pay claims only in the event that its affiliated obligors default on their contractual obligations related to their auto warranty products. In Lone Peak’s six-year history, the company has yet to incur any claims or losses related to its CLIP business, and it maintains moderate expense levels, which have resulted in annual combined ratios that fall well below the industry average. Prospectively, management’s projections are in line with its current level of profitability and indicates the company will not deviate from the existing low-risk structure of its policies.

Lone Peak’s balance sheet is supported by risk-adjusted capitalization at the very strong level, as measured by Best’s Capital Adequacy Ratio (BCAR), as well as its strong liquidity and low underwriting leverage. The company’s neutral business profile reflects the low-risk nature of its failure-to-perform CLIP, as well as its strong geographic spread. AM Best considers Lone Peak’s ERM program to be appropriate for the size and scope of its operation.

The positive outlooks reflect AM Best's view that Lone Peak's operating performance metrics will continue to align with, as well as, outperform its peers in the auto warranty composite. The overall balance sheet strength assessment is expected to be maintained at the strong level, supported by its very strong level of risk-adjusted capitalization, with the company's favorable operating performance providing a consistent stream of earnings contributing to future surplus growth.

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 use of Best’s Credit Ratings, Best’s Performance Assessments, Best’s Preliminary Credit Assessments and AM Best press releases, please view Guide to Proper Use of Best’s Ratings & Assessments.

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.

Copyright © 2025 by A.M. Best Rating Services, Inc. and/or its affiliates. ALL RIGHTS RESERVED.

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