AM Best has upgraded the Long-Term Issuer Credit Rating (Long-Term ICR) to “bb+” (Fair) from “bb” (Fair) and affirmed the Financial Strength Rating (FSR) of B (Fair) of Tower Bonding and Surety Co., Inc. (Tower Bonding) (San Juan, PR). The outlook of the Long-Term ICR has been revised to stable from positive, while the outlook of the FSR is stable.

The Credit Ratings (ratings) reflect Tower Bonding’s balance sheet strength, which AM Best assesses as adequate, as well as its adequate operating performance, limited business profile and marginal enterprise risk management.

The Long-Term ICR upgrade reflects the sustained improvement in Tower Bonding’s balance sheet strength metrics and its overall risk-adjusted capitalization from consistent operating profitability, resulting in good policyholder surplus appreciation of almost 30% during the most recent five-year period. However, premium leverage remains somewhat elevated relative to the composite average. The operating performance assessment is supported by returns on revenue and equity measures, which compares favorably to the composite average on a five-year average basis, although these measures have historically been variable. Tower Bonding’s limited business profile assessment is supported by a geographic concentration of risk and limited product diversification, as it underwrites bail bonds only in Puerto Rico. The company’s risk management capabilities are not fully aligned with this risk profile, which supports the marginal assessment.

This press release relates to Credit Ratings that have been published on AM 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 AM Best’s Recent Rating Activity web page. For additional information regarding the use and limitations of Credit Rating opinions, please view Guide to Best's Credit Ratings. For information on the proper use of Best’s Credit Ratings, Best’s Performance Assessments, Best’s Preliminary Credit Assessments and AM Best press releases, please view Guide to Proper Use of Best’s Ratings & Assessments.

AM Best is a global credit rating agency, news publisher and data analytics provider specializing in the insurance industry. Headquartered in the United States, the company does business in over 100 countries with regional offices in London, Amsterdam, Dubai, Hong Kong, Singapore and Mexico City. For more information, visit www.ambest.com.

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