A top insurance company credit rating agency has given Pekin Insurance an A- rating with a negative outlook.
AM Best says while Pekin Insurance has a "very strong" overall balance sheet, severe storms throughout its operating territory are increasing the financial pressures on its property insurance business and posing a risk to the overall bottom line. The overall rating was unchanged at A-.
"Management has implemented a wide range of initiatives to improve its capital position and underwriting performance, including placing a personal lines moratorium in all states, rate revisions, higher deductibles, personal lines agency terminations and expense reductions, which should help to stabilize results and eventually lessen volatility," AM Best said in its rating outlook this month.
Pekin Insurance is concentrating more on commercial and life insurance going forward. The company did resume accepting personal lines business on a "controlled" basis on Oct. 1 within most of the counties it serves, according to a press release.
The company says it is also expanding its geographic reach to reduce its exposure to Midwestern storms. Pekin Insurance recently expanded into Utah and Michigan, and plans to move into several more states in the next few years.
“Transparency is paramount to us,” said Dan Connell, chairman, CEO, and president of Pekin Insurance in a statement. “And we will keep our stakeholders informed about any developments regarding our financial standing. Our commitment to providing exceptional service and coverage to our customers remains unwavering, ensuring their peace of mind during uncertain times.”
The company's net income in the first half of 2024 was $7.7 million, compared to just $800,000 in the first half of 2023. Year-over-year premium income was about the same at $94.7 million, and investment income increased slightly to $35.5 million from $34.2 million.
Net income in 2023 was $1.7 million. Pekin Insurance had a net loss of $4.7 million in 2022.
Pekin Insurance sells casualty and property insurance in Illinois and seven other states. It has around 700 employees and 1,200 independent agencies within its eight-state area.
