Great Plains Casualty Upgraded, Removed from Under Review

A.M. Best has removed from under review with positive implications and upgraded the Financial Strength Rating to A- (Excellent) from B++ (Good) and the Long-Term Issuer Credit Rating to “a-” from “bbb+” of Great Plains Casualty Inc. (Great Plains) in Cedar Rapids, Iowa. The outlook is stable.

Great Plains’ ratings were placed under review on Oct. 13, 2017, in conjunction with the release of the updated Best’s Credit Rating Methodology (BCRM).

The ratings reflect Great Plains’ balance sheet strength, which is categorized as very strong, based on its limited size, as well as its strong operating performance, limited business profile and appropriate enterprise risk management (ERM).

Balance sheet strength is supported by the company’s risk-adjusted capitalization being at the strongest level, excellent liquidity, modest underwriting and investment leverage, and strength of reserves. Surplus has grown steadily over the company’s 10-year history at a compounded annual growth rate of 8.8 percent.

The ratings also consider the financial leverage and interest coverage of parent company, Hillcrest Holdings Inc., which had manageable debt levels as of Dec. 31, 2017.

Great Plains continues to report favorable operating performance, primarily driven by excellent underwriting results. The company’s five- and 10-year average combined ratios outperform the averages for the commercial automobile composite by 30 points. Great Plains’ business profile is assessed as limited, due to its narrow market focus on the commercial auto sector and its reliance on a sister company, CRST International Inc. (CRST), for business.

Great Plains derives its customer base from the independent contractors affiliated with CRST, which provides transportation solutions and services to manufacturers and distributors in the United States and Canada.