A.M. Best has revised the outlooks to positive from stable and affirmed the Financial Strength Rating of B++ (Good) and the Long-Term Issuer Credit Rating of “bbb+” of Eastern Dentists Insurance Company (A Dental Society Risk Retention Group) (EDIC) (Burlington, VT).

The Credit Ratings (ratings) reflect EDIC’s strong balance sheet, profitable earnings performance, comprehensive enterprise risk management program (ERM), and a management team highly experienced and focused in underwriting medical professional liability (MPL) coverage for dentists. The company is the market leader in providing MPL coverage to dentists in Massachusetts. It also writes in New York, North Carolina and eight other states from Maine to Virginia.

Balance sheet strength is exhibited through sound risk-adjusted capitalization, excellent liquidity, modest underwriting and investment leverage, and historically redundant loss reserves. Surplus growth has been positive year-over-year mainly driven by underwriting income supplementing investment returns. The experienced management team’s comprehensive ERM program is used to identify, quantify, and address its operating and strategic risks and opportunities within its markets and line of business.

These favorable rating attributes are offset partially by EDIC’s limited business profile, characterized by a concentration of underwriting risk in MPL lines for dentists only. This concentration makes EDIC more susceptible to market cycle fluctuations, competition, and changes in market dynamics as they relate to the delivery of dental health care. These concerns are mitigated partially by management’s expertise in underwriting MPL for dentists, and providing quality claims management and loss control for its insureds.

The positive rating outlooks are based on A.M. Best’s anticipation that EDIC will continue to strengthen its balance sheet while producing better-than-average return measures despite the challenges that it faces.

This press release relates to Credit Ratings that have been published on A.M. 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 A.M. Best’s Recent Rating Activity web page. For additional information regarding the use and limitations of Credit Rating opinions, please view Understanding Best’s Credit Ratings.

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