AM Best Rating Points to CompTrust’s Expansive Possibilities
By Bill Caton, CompTrustAGC Manager
In a favorable report, AM Best has renewed CompTrustAGC’s rating at “A-“ for the coming year with a stable outlook. While that is an accomplishment in itself – CompTrustAGC is the only fund in Alabama to maintain an AM Best rating — there is more to the story upon closer inspection.
The key to CompTrustAGC’s 18th consecutive “A-“ rating is its financial strength. Of course, CompTrustAGC has grown to be a $90 million fund with $42 million in members’ equity. But when AM Best talks financial strength it includes capital, investment philosophy, underwriting and management. Those combined factors mean the potential exists for CompTrustAGC and AGCP&C to grow into a larger size category and expand into a multi-line, multi-state insurance entity. CompTrustAGC and AGCP&C – through agreements with national carriers — already are available to Alabama-domiciled contractors who need workers’ compensation and property and casualty coverages in other states.
Calling the balance sheet “very strong,” the Best report reads: “The Alabama Associated General Contractors Self-Insurance Fund maintains the strongest level of risk-adjusted capitalization as measured by Best’s Capital Adequacy Ratio at the 99.6 percent VaR confidence level.”
Best says of CompTrust’s operating performance, “Favorable underwriting income coupled with a consistent stream of investment income has resulted in five consecutive years of pre-tax operating gains, net income and additions to surplus.”
While our Bonanza Credit program somewhat slows the growth of members’ equity, Best takes note that even returning $3.5 million annually to our members comes to only 22 percent of our combined ratio.
It is that strength that allowed us to partner with Benchmark Insurance Co., a national carrier, to form in 2017 a P&C facility (AGCP&C) our contractor members can access. AGCP&C – which has taken off in 2018 — is available only in a package with our top-of-the-line workers’ compensation coverage through CompTrustAGC. And we continue to grow our suite of coverages, adding Contractors Professional Liability and Contractors Pollution Liability over the summer.
Meanwhile, AM Best continues to recognize all aspects of CompTrustAGC’s financial power that makes these products possible. Best lists the fund’s Enterprise Risk Management appraisal as appropriate because “executive management at AGC Services, Inc. …utilize effective operating and financial controls.” Best also writes, “The fund utilizes the services of three investment managers to address various credit, financial and interest rate risks in its investment portfolio. Additionally it utilizes the services of an independent actuarial consulting firm to assess the adequacy of the fund’s loss and LAE reserves.”
Everything comes back to CompTrustAGC and AGCP&C’s capital position and strong management. Our current rate of growth, our vision for the future and our conservative, experienced management could very well take CompTrustAGC and AGCP&C into a future where we meet all our contractor members’ insurance needs – inside Alabama and out.
At CompTrustAGC we’re going places other funds cannot even imagine.
Contact your agent or CompTrustAGC VP Tammy King (205.451.1400; tammyk@alagc.org) to get a quote.
CompTrustAGC is identified by A.M. Best as the Alabama Associated General Contractors Self-Insurers Fund, A.M. Best # 055028.