Kemper

AM Best upgraded the insurer's P&C unit to A from A- last week.

Better underlying results and lower cats were partially offset by a $10mn reserve charge in preferred personal auto.

The rating agency specifically cited the carrier’s consistently high risk-adjusted capitalization in announcing its decision.

The $370mn deal follows the acquisition of Infinity in 2017 and Alliance United in 2015.

The insurer’s commercial auto and personal book has grown by 40% annually since 2015.

The deal includes AAC’s 110-agency strong captive network, which focuses on selling car insurance to Hispanic communities.

Despite the decline in profits, the carrier’s underlying combined ratio in the specialty segment improved by 5.9 points to 85.9%.

The carrier said it does not expect to recover any losses through its reinsurance programs.

The “empty-street” economy has left auto exposed names in a relatively favorable position, highlighted by a second quarter of strong earnings growth and beats when compared to street estimates.

The executive said the Sunshine State is one of a few spots where personal auto rate increases are being achieved.

The firm saw an 8.3-point decline in its underlying loss ratio to 64.8%

Kemper pointed to divergent competitive trends between non-standard and preferred.