OLDWICK, N.J.--(BUSINESS WIRE)--#insurance--AM Best has affirmed the Financial Strength Rating of B++ (Good) and the Long-Term Issuer Credit Rating of "bbb+" (Good) of Forge Insurance Company (Forge) (District of Columbia). The outlook of these Credit Ratings (ratings) is positive.

The ratings reflect Forge's balance sheet strength, which AM Best assesses as very strong, as well as its marginal operating performance, limited business profile and appropriate enterprise risk management.

The positive outlooks reflect AM Best's expectation for continued improvement in Forge's operating results as it executes on its revised strategy. The company is in the process of transforming its book of business from legacy public auto risks toward commercial auto for artisan contractors and other small- to medium-size businesses, which management believes are subject to lower claims frequency. Further, claims severity is expected to be managed through targeting business primarily in favorable geographic locations within this segment. Consequently, the company's loss ratio volatility has decreased materially and its discontinued operations, which led to the marginal operating performance assessment, have effectively run-off. AM Best expects Forge's currently elevated underwriting expense ratio to normalize as the company grows into this new segment through its scalable information technology-driven platform. Forge's full-year 2023 operating results demonstrated that it is well on its way to reaching its targets.

Positive rating action may occur with sustained improvement in Forge's underwriting and operating performance while maintaining the strongest level of risk-adjusted capitalization, as measured by Best's Capital Adequacy Ratio (BCAR), as the company executes its strategic plans to expand into new vehicle classes and jurisdictions within the commercial auto segment.

Negative rating action may occur if there is a material erosion of Forge's risk-adjusted capitalization and/or overall balance sheet strength. This may occur due to execution risk associated with transitions in the company's business plan, excessive growth or inadequate reserving.

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.

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