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Donegal Group (DGICA) & its Members Receive Rating Action
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Donegal Group Inc. (DGICA - Free Report) and the members of Donegal Insurance Group recently received rating action from the credit rating giant A.M. Best. The rating agency affirmed the Financial Strength Rating (FSR) of A (Excellent) and the Long-Term Issuer Credit Ratings (Long-Term ICR) of “a” of the members of the Donegal Insurance Group (“Donegal Group”).
At the same time, the credit rating giant affirmed the Long-Term ICR of “bbb” of Donegal Group Inc, which is the publicly traded holding company. The outlook of the above-mentioned credit ratings remained stable.
The ratings affirmation of the Donegal Group members represents their stellar risk-adjusted capitalization, robust overall liquidity, sustained five-year operational performance and strong business profile.
Moreover, the rating affirmation of the Long-Term ICR of the property and casualty (P&C) insurer acknowledges the overall financial strength of its operational performance, decent level of financial leverage and the subordination of its creditors to the insurance companies’ policyholders.
However, the P&C insurer’s overall less-than-favorable operational performance, over the past five years (2011 through 2015), in comparison with its previous five-year period (2006 through 2010). This along with the company’s somewhat higher expense structure will partially offset the positive rating factors. Nonetheless, the rating agency remains optimistic about management’s actions, which are likely to boost the operational performance through rate increases, stricter underwriting standards and utilization of enterprise risk management.
Notably, shares of Donegal Group gained 8.06% in the last one month, outperforming the Property and Casualty industry’s growth of 2.06%. The company’s prudent organic and acquisition growth as well as conservative investing and pricing discipline have resulted in the upside.
Rating affirmations or upgrades from credit rating agencies play an important role in retaining investors’ confidence in the stock as well as maintaining credit worthiness in the market. Hence, it is expected that such ratings will aid the company gain more business, going forward.
Stocks to Consider
Some better-ranked stocks from the same space include AXIS Capital Holdings Limited (AXS - Free Report) , State National Companies, Inc. , Mercury General Corporation (MCY - Free Report) and Arch Capital Group Ltd. (ACGL - Free Report) .
AXIS Capital offers specialty lines insurance and treaty reinsurance products worldwide. The company delivered positive surprises in all of the last four quarters with an average beat of 30.19%. The company sports a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
State National Companies offers property and casualty insurance in the U.S. It delivered positive surprises in two of the last four quarters with an average beat of 21.28%. The company sports a Zacks Rank #1.
Mercury General deals in writing personal automobile insurance in the U.S. It delivered positive surprises in two of the last four quarters, but with an average miss of 21.04%. The company sports a Zacks Rank #1.
Arch Capital offers property, casualty, and mortgage insurance and reinsurance products worldwide. It delivered positive surprises in all of the last four quarters with an average beat of 9.27%. The company carries a Zacks Rank #2 (Buy).
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Donegal Group (DGICA) & its Members Receive Rating Action
Donegal Group Inc. (DGICA - Free Report) and the members of Donegal Insurance Group recently received rating action from the credit rating giant A.M. Best. The rating agency affirmed the Financial Strength Rating (FSR) of A (Excellent) and the Long-Term Issuer Credit Ratings (Long-Term ICR) of “a” of the members of the Donegal Insurance Group (“Donegal Group”).
At the same time, the credit rating giant affirmed the Long-Term ICR of “bbb” of Donegal Group Inc, which is the publicly traded holding company. The outlook of the above-mentioned credit ratings remained stable.
The ratings affirmation of the Donegal Group members represents their stellar risk-adjusted capitalization, robust overall liquidity, sustained five-year operational performance and strong business profile.
Moreover, the rating affirmation of the Long-Term ICR of the property and casualty (P&C) insurer acknowledges the overall financial strength of its operational performance, decent level of financial leverage and the subordination of its creditors to the insurance companies’ policyholders.
However, the P&C insurer’s overall less-than-favorable operational performance, over the past five years (2011 through 2015), in comparison with its previous five-year period (2006 through 2010). This along with the company’s somewhat higher expense structure will partially offset the positive rating factors. Nonetheless, the rating agency remains optimistic about management’s actions, which are likely to boost the operational performance through rate increases, stricter underwriting standards and utilization of enterprise risk management.
Notably, shares of Donegal Group gained 8.06% in the last one month, outperforming the Property and Casualty industry’s growth of 2.06%. The company’s prudent organic and acquisition growth as well as conservative investing and pricing discipline have resulted in the upside.
Rating affirmations or upgrades from credit rating agencies play an important role in retaining investors’ confidence in the stock as well as maintaining credit worthiness in the market. Hence, it is expected that such ratings will aid the company gain more business, going forward.
Stocks to Consider
Some better-ranked stocks from the same space include AXIS Capital Holdings Limited (AXS - Free Report) , State National Companies, Inc. , Mercury General Corporation (MCY - Free Report) and Arch Capital Group Ltd. (ACGL - Free Report) .
AXIS Capital offers specialty lines insurance and treaty reinsurance products worldwide. The company delivered positive surprises in all of the last four quarters with an average beat of 30.19%. The company sports a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
State National Companies offers property and casualty insurance in the U.S. It delivered positive surprises in two of the last four quarters with an average beat of 21.28%. The company sports a Zacks Rank #1.
Mercury General deals in writing personal automobile insurance in the U.S. It delivered positive surprises in two of the last four quarters, but with an average miss of 21.04%. The company sports a Zacks Rank #1.
Arch Capital offers property, casualty, and mortgage insurance and reinsurance products worldwide. It delivered positive surprises in all of the last four quarters with an average beat of 9.27%. The company carries a Zacks Rank #2 (Buy).
Zacks’ Best Private Investment Ideas
In addition to the recommendations that are available to the public on our website, how would you like to follow all Zacks' private buys and sells in real time? Our experts cover all kinds of trades… from value to momentum . . . from stocks under $10 to ETF and option moves . . . from stocks that corporate insiders are buying up to companies that are about to report positive earnings surprises. You can even look inside exclusive portfolios that are normally closed to new investors. Starting today, for the next month, you can have unrestricted access. Click here for Zacks' private trades >>