KBRA Affirms Ratings for First Protective Insurance Company and Frontline Insurance Unlimited Company
22 Aug 2025 | New York
KBRA affirms the BBB+ insurance financial strength ratings (IFSR) for First Protective Insurance Company ("FPIC") and Frontline Insurance Unlimited Company ("FIUC"; together, "Frontline Insurance" or "the Company"). The Outlook for both ratings is Stable.
Key Credit Considerations
The ratings for both entities reflect an experienced management team with a focused strategy, financial flexibility through its holding company/managing general agent structure, a well-established Florida market position, and an adequate catastrophe reinsurance program. Management has demonstrated consistent execution through market cycles, supported by deep expertise in coastal property markets, ongoing investment in technology and analytics, and strong governance structures. The group benefits from recurring fee income generated by affiliated MGAs and service entities, which provides financial flexibility outside of the statutory insurers. These strengths are complemented by stable relationships with key reinsurers.
Frontline has delivered four consecutive years of underwriting profitability, supported by declining attritional losses, improved claims practices, and the favorable impact of Florida litigation reforms. Surplus increased meaningfully at both carriers, while net income materially exceeded plan at both carriers. The group’s catastrophe reinsurance programs for 2025–2026 provide per-event limits that exceed modeled 1-in-130-year modeled PMLs and include reinstatement provisions that provide multi-event capacity. The Company’s distribution platform remains concentrated in Florida but is supported by a well managed network of approximately 900 appointed agents and modest expansion into additional states.
Balancing these credit strengths are moderately weak risk-adjusted capitalization, elevated premium leverage, and concentrated earnings in Florida property lines. RBC ratios of 317% at FPIC and 311% at FIUC remain below benchmarks, with gross premium-to-surplus multiples of 7.5x and 3.3x, respectively. Geographic diversification efforts outside of Florida and surrounding Southeastern states are in early stages, with premium writings outside of the Southeast not yet material, leaving the group heavily reliant on reinsurance and exposed to model uncertainty in years with severe or multiple storm events.
Rating Sensitivities
A favorable change in risk profile, including purchase of higher reinsurance limits or meaningful diversification of geographic or product exposure, improved underwriting leverage and strengthened risk-adjusted capitalization, favorable execution of planned geographic expansion, and financial performance that consistently exceeds projections provided to KBRA could result in positive rating action.
An unfavorable change in risk profile, such as inability to secure adequate reinsurance terms, deterioration in reinsurance panel credit quality, reinsurance non-collectability, or exceedance of reinsurance program limits, deterioration in risk-adjusted capitalization and underwriting leverage, or material adverse reserve development, particularly in more recent accident years, could result in negative rating action.
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