KBRA assigns a BBB insurance financial strength rating (IFSR) to American Traditions Insurance Company. The Outlook is Stable.

American Traditions Insurance Company is a property/casualty insurer domiciled in Florida specializing in personal lines insurance exclusively within the state. The company offers a variety of products but predominantly writes within the niche manufactured housing segment as well as the traditional homeowners (HO-3) market. The insurance financial strength rating (IFSR) reflects an experienced management team with a focused strategy, consistent profitability at the managing general agent affiliate which enhances financial flexibility and operational stability at American Traditions, a conservative asset portfolio with low investment risk, a strong liquidity and asset-liability profile, and a strong local market presence with a well-established distribution network.

Balancing these strengths are the company’s geographic and earnings concentration which necessitates a dependence on reinsurance and exposes it to event risk, moderately weak to adequate risk-based capitalization, and elevated premium leverage. Further, recent losses across the last five years have been driven by natural catastrophes and elevated storm frequency, though the company has revamped exposure management tools, tightened underwriting guidelines, and implemented rate increases, which KBRA views favorably.

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Disclosures

Further information on key credit considerations, sensitivity analyses that consider what factors can affect these credit ratings and how they could lead to an upgrade or a downgrade, and ESG factors (where they are a key driver behind the change to the credit rating or rating outlook) can be found in the full rating report referenced above.

A description of all substantially material sources that were used to prepare the credit rating and information on the methodology(ies) (inclusive of any material models and sensitivity analyses of the relevant key rating assumptions, as applicable) used in determining the credit rating is available in the Information Disclosure Form(s) located here.

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Further disclosures relating to this rating action are available in the Information Disclosure Form(s) referenced above. Additional information regarding KBRA policies, methodologies, rating scales and disclosures are available at www.kbra.com.

About KBRA

Kroll Bond Rating Agency, LLC (KBRA) is a full-service credit rating agency registered with the U.S. Securities and Exchange Commission as an NRSRO. Kroll Bond Rating Agency Europe Limited is registered as a CRA with the European Securities and Markets Authority. Kroll Bond Rating Agency UK Limited is registered as a CRA with the UK Financial Conduct Authority pursuant to the Temporary Registration Regime. In addition, KBRA is designated as a designated rating organization by the Ontario Securities Commission for issuers of asset-backed securities to file a short form prospectus or shelf prospectus. KBRA is also recognized by the National Association of Insurance Commissioners as a Credit Rating Provider.

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