GeoVera’s AM Best Rating Re-affirmed as an A

August 2022 – GeoVera announces that “GeoVera’s “A” (Excellent) rating by A.M. Best has been re-affirmed in June 2022. ” This rating refers to their Financial Strength Rating. An A rating is considered the third hightest FSR attainable.

According to an online publication- the AM Best rationale for the rating include the following considerations. They consider Geovera’s Balance Sheet strength “Very Strong” their Operating Performance to be “Strong” and “Neutral” on their Business Profile.

GeoVera’s AM Best FSR Rating as of August 2022 = A

Balance Sheet = Very Strong

Operating Performance = Strong

Business Profile = Neutral

Some of the more salient notes from AM Best’s report include: Geovera’s surplus grew “$16 million in 2021 to $118 million. The report notes that “given the nature of the business” that “the balance sheet of Geovera…may be…subject to higher than-expected calls on capital…” And “the group has exposure to certain extreme ‘tail’ events related to wind and earthquake.” Reader of this stie should note that this insurer writes insurance other than just earthquake insurance.

A cautionary note though exists in the form of reinsurance. Geovera’s “dependence leaves the group somewhat suscetible to changes in reinsurance availability, pricing and terms and conditions.” This simply means that because the insurer needs reinsurance than if that market were to become more expensive or harder to find – it could change the outlook.

The report notes what seems most obvious to us. That “GeoVera’s biggest individual risk is its susceptibility to a severe California Earthquake Event.”

AM Best does have a “Negative” view of their Outlook. They note that in their “view…GeoVera’s operating performance has weakened somewhat relative to similarly assessed, driven by several… years of outsized CAT losses.” But they note that “under new leadership” the “portfolio transformation” could “return the group to …strong operating results.” Interestingly they do note which other ‘ similarly assessed’ insurers they are referring to. Given Geovera’s unique business model – we would like prefer to know. These insurers could not be known at the time of this blog post.

A reaffirmation simply means that the rating was already made and they are keeping it at the same level. Therefore Geovera’s previous FSR was an A as well. In other words, no rating change. However new notes and observations are always added to these reports.

Geovera’s own site notes the following opinion: “This rating is unique amongst other insurance providers of a similar kind, and it is a good indicator that, if a large-scale claim event were to occur, the GeoVera Group would be prepared to support their policyholders at their greatest time of need.” The term ‘similar kind’ is an important consideration because compairing Geovera’s rating vs another standard P&C insurer is somewhat pointless. Consider compairing their FSR rating to the CEA or other independent earthquake insurers.

Please note that this site uses both writings of the name of this insurer: GeoVera and Geovera. Geovera is considered an Independent Earthquake Insurance provider.

Intentionally we have not reported on the entire report as it is quite lengthy. And wordy. It is advised that you check the FSR of any insurer that you are considering purchasing a policy from, at the time of purchase. Ratings do change. Consumers should consider, amongst other considerations, the financial strength rating of any firm they are purchasing cover from. Especially earthquake insurance. This rating is subject to change. QuakeCov is not responsible for this Financial Strength Rating of GeoVera Earthquake.

Copies of the report may be downloaded here.