AM Revises Outlook to Positive for Texas’ Standard Casualty

AM Best has revised the outlook to affirmative from unchangeable for the Long-Term Issuer Credit Rating (Long-Term ICR) and affirmed the Financial Strength Rating (FSR) of B++ (Good) and the Long-Term ICR of “bbb” (Good) of Standard Casualty Company, based successful New Braunfels, Texas. The outlook of the FSR is stable.

The Credit Ratings (ratings) bespeak Standard Casualty’s equilibrium expanse strength, which AM Best assesses arsenic strong, arsenic good arsenic its marginal operating performance, constricted concern illustration and due endeavor hazard absorption (ERM). Additionally, the ratings admit the synergistic advantages and fiscal enactment derived from the company’s narration with its eventual parent, Cavco Industries, Inc. (Cavco) [NASDAQ; CVCO].

The Long-Term ICR revised outlook to affirmative from unchangeable reflects Standard Casualty’s betterment successful risk-adjusted capitalization, arsenic measured by Best’s Capital Adequacy Ratio (BCAR), which is present assessed arsenic strongest, from antecedently being aligned with precise strong. The much robust presumption reflects important surplus maturation successful 2025 (43%), arsenic good arsenic passim the opening of 2026, coupled with derisking initiatives that person reduced wide exposures and driven down the gross probable maximum nonaccomplishment successful caller years. Collectively, the actions besides assisted betterment successful Standard Casualty’s cardinal equilibrium expanse metrics specified arsenic underwriting and reserve leverage, arsenic premium and reserves declined portion surplus grew. Furthermore, the institution benefits from its narration with Cavco, arsenic the institution has further fiscal flexibility done the quality to entree funds held astatine affiliated entities.

Standard Casualty’s marginal operating show is reflective of volatility successful its results implicit the astir caller five-year period, earlier considerably improving successful 2025, and done the opening of 2026. Prior twelvemonth losses came arsenic a effect of changing upwind patterns, starring to much predominant and terrible events, arsenic good arsenic greater assertion severity owed to inflation. However, a simplification successful wide exposures done the non-renewal of high-risk accounts and exertion of stricter underwriting guidelines person improved results. The constricted concern illustration appraisal is based connected the company’s comparatively concentrated geographic footprint and spot focused portfolio, portion the due ERM appraisal reflects improving hazard appetite strategies that person caused results to inclination positively.

Source: AM Best

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