AM Best has upgraded the Financial Strength Rating to A- (Excellent) from B++ (Good) and the Long-Term Issuer Credit Rating (Long-Term ICR) to “a-” (Excellent) from “bbb+” (Good) of Illinois Casualty Company (ICC). Concurrently, AM Best has upgraded the Long-Term ICR to “bbb-” (Good) from “bb+” (Good) of ICC Holdings, Inc. (ICCH) [NASDAQ: ICCH], the publicly traded holding company that owns 100% of ICC. The outlook of these Credit Ratings (ratings) is stable. Both companies are domiciled in Rock Island, IL.

The ratings reflect ICC’s balance sheet strength, which AM Best assesses as very strong, as well as its adequate operating performance, limited business profile and appropriate enterprise risk management (ERM).

The upgrade reflects sustained improvement in ICC’s overall balance sheet strength. ICC has maintained the strongest level of risk-adjusted capitalization, as measured by Best’s Capital Adequacy Ratio (BCAR), while lowering underwriting leverage over the most recent five-year period. Surplus has grown in four of the past five years, primarily driven by investment income and the one-time capital contribution of $18.5 million when ICC demutualized and proceeds from the public offering were down-streamed from the holding company into the insurance entity. In total, surplus grew by 119% from year-end 2015 to year-end 2020. Loss reserve development has been consistently redundant and loss reserves as a percentage of surplus and earned premium compare favorably with AM Best’s composite average. Furthermore, ICC prudently employs a reinsurance program to insulate the balance sheet from severe events.

ICC continues to diversify geographically its niche book of business serving the food and beverage industry. Despite the pandemic presenting a number of challenges, ICC has effectively navigated the stresses over the previous year. Coverage for business interruption claims was not triggered due to the prevailing contract language and the company smoothly transitioned to a remote working environment. Premiums declined in 2020 as a result of pressure on new business and restaurant sales; however, this is expected to rebound once pandemic pressures subside. While expanding, the company has maintained adequate operating performance and modest market share in key states. The company’s ERM program is considered appropriate for the risk profile.

This press release relates to Credit Ratings that have been published on AM Best’s website. For all rating information relating to the release and pertinent disclosures, including details of the office responsible for issuing each of the individual ratings referenced in this release, please see AM Best’s Recent Rating Activity web page. For additional information regarding the use and limitations of Credit Rating opinions, please view Guide to Best’s Credit Ratings. For information on the proper media use of Best’s Credit Ratings and AM Best press releases, please view Guide for Media - Proper Use of Best’s Credit Ratings and AM Best Rating Action Press Releases.

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