Press Release|Insurance

KBRA Affirms Ratings for The Philadelphia Contributionship Operating Companies and The Philadelphia Contributionship Mutual Holding Company

7 Sep 2023   |   New York


KBRA affirms the A- insurance financial strength rating (IFSR) of The Philadelphia Contributionship For The Insurance Of Houses From Loss By Fire, Inc. (TPC), The Philadelphia Contributionship Insurance Company, and Germantown Insurance Company and the BBB- issuer rating of The Philadelphia Contributionship Mutual Holding Company. The Outlook for all ratings is Stable.

TPC is the oldest property insurance company in the United States today. It primarily writes homeowners’ and dwelling fire insurance in Pennsylvania and New Jersey.

Key Credit Considerations

The ratings reflect TPC’s strong risk adjusted capitalization and surplus growth over the past decade, resulting in conservative underwriting leverage ratios that are significantly stronger than the industry average. The rating also reflects TPC’s strong management team with a deep bench, consistent favorable prior year reserve development, a sound enterprise risk management framework that is appropriate for the company’s scope of operations, and an investment portfolio that has historically provided favorable investment returns. Balancing these strengths are TPC’s heightened level of investment risk, with equities comprising approximately 57% of the investment portfolio. However, as of June 30, 2023, equity market volatility is partially offset by TPC’s high-quality bond portfolio and an equity allocation that consists primarily of blue-chip stocks. Profitability metrics have been unfavorable in recent years due to excessive growth arising out of a previous expansion strategy. Management is executing a three-year plan to reverse this trend primarily by maintaining rate adequacy and restructuring their agency distribution system, along with a variety of other initiatives, which has improved near term results. The company has moderate exposure to natural catastrophes and other large non-catastrophe events of increasing severity due to its line of business and geographic areas of operation and is also exposed to execution risk related to their strategic plan.

Rating Sensitivities

Controlled geographic diversification, decreased equity exposure, and sustained favorable underwriting results may result in positive rating action.

Reduction in risk-adjusted capitalization and increased balance sheet leverage, unfavorable earnings trends, and adverse change in risk profile may result in negative rating action.

To access rating and relevant documents, click here.



A description of all substantially material sources that were used to prepare the credit rating and information on the methodology(ies) (inclusive of any material models and sensitivity analyses of the relevant key rating assumptions, as applicable) used in determining the credit rating is available in the Information Disclosure Form(s) located here.

Information on the meaning of each rating category can be located here.

Further disclosures relating to this rating action are available in the Information Disclosure Form(s) referenced above. Additional information regarding KBRA policies, methodologies, rating scales and disclosures are available at

About KBRA

Kroll Bond Rating Agency, LLC (KBRA) is a full-service credit rating agency registered with the U.S. Securities and Exchange Commission as an NRSRO. Kroll Bond Rating Agency Europe Limited is registered as a CRA with the European Securities and Markets Authority. Kroll Bond Rating Agency UK Limited is registered as a CRA with the UK Financial Conduct Authority. In addition, KBRA is designated as a designated rating organization by the Ontario Securities Commission for issuers of asset-backed securities to file a short form prospectus or shelf prospectus. KBRA is also recognized by the National Association of Insurance Commissioners as a Credit Rating Provider.

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