A.M. Best Co. has revised the outlook to positive from stable and
affirmed the financial strength rating of A- (Excellent) and issuer
credit ratings of “a-“ of Paratransit Insurance Company, A Mutual
Risk Retention Group (Paratransit) (Memphis, TN).
The ratings reflect Paratransit's sound capitalization, strong
reinsurance program and high member retention rates. Partially
offsetting these positive factors is the company's business risk
associated with writing one class of business within a narrow market
scope, albeit with a good geographic spread of risk. Nonetheless, the
company is committed to reserve adequacy and has numerous years of
experience in its niche market of non-urban taxicabs and paratransit
The positive rating factors are primarily derived from Paratransit's
focus on solvency, a high quality investment portfolio and the
conservative approach to the generation of new business. In addition,
the company's member contribution policy, requiring new and renewing
members to pay an annual non-refundable contribution per vehicle,
assists Paratransit in generating surplus and supporting expansion.
A.M. Best recognizes Paratransit's solid operating performance before
policyholder dividends and strong capitalization as measured by Best's
Capital Adequacy Ratio (BCAR).
A.M. Best could downgrade the ratings or revise the outlook if the
company's BCAR declines, operating performance and risk profile
deteriorate, there is an increase in retention, or a material loss in
capital occurs that does not support the ratings.
The methodology used in determining these ratings is Best’s Credit
Rating Methodology, which provides a
comprehensive explanation of A.M. Best’s rating process and contains the
different rating criteria employed in the rating process. Key criteria
utilized include: “Risk Management and the Rating Process for Insurance
Companies”; “Understanding BCAR for Property/Casualty Insurers”; and
“Rating Members of Insurance Groups.” Best’s Credit Rating Methodology
can be found at www.ambest.com/ratings/methodology.
Founded in 1899, A.M. Best Company is the world's oldest and most
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