AM Best has affirmed the Financial Strength Rating of A (Excellent) and the Long-Term Issuer Credit Ratings of "a" (Excellent) for the members of Ally Insurance Group (Ally Insurance). The members include Motors Insurance Corporation and its reinsured subsidiaries, MIC Property and Casualty Insurance Corporation and CIM Insurance Corporation, as well as an affiliate, Ally International Insurance Company Ltd. (AIICL). All companies are domiciled in Detroit, MI, except AIICL, which is domiciled in Bermuda. The outlook of these Credit Ratings (ratings) is stable.

The ratings reflect Ally Insurance's balance sheet strength, which AM Best assesses as strongest, as well as its adequate operating performance, neutral business profile and appropriate enterprise risk management. The ratings also reflect the neutral impact from the ultimate parent, Ally Financial Inc. (NYSE:ALLY), a bank holding company headquartered in Detroit, MI.

Ally Insurance's balance sheet strength assessment is supported by its strongest level of risk-adjusted capitalization, as measured by Best's Capital Adequacy Ratio (BCAR), modest underwriting leverage (despite premium sessions to producer-owned reinsurance companies), prudent reserving and a conservative investment asset base. The group's history of large dividend payments to its ultimate parent, after exceeding capital targets, has not impacted surplus growth over the most recent five-year period, and the group's quality of capital remains high as its earnings capacity remains solid through disciplined underwriting and a steady stream of investment income on its growing investment asset base.

The group's operating performance remains adequate, although it was impacted negatively in 2023 and in the first half of 2024 by weather-related losses in its auto physical damage line of business. Weather-related losses had a greater impact in 2024 due to elevated hail activity damaging higher vehicle inventory levels. In addition, the group's guaranteed asset protection (GAP) product experienced an increase in losses year over year, driven by higher loan to values given normalization in used vehicle values and the continued impact of the macroeconomic challenges facing the auto industry. These factors were offset partially by reinsurance mitigation of weather exposure and top-line growth in 2023 and through the second quarter of 2024, driven by solid momentum in property/casualty and Finance and Insurance segments. Overall earnings also have benefited from solid growth in net investment income during this time.

Ally Insurance's neutral business profile is supported by its well-established presence as a specialized writer of vehicle service contracts and GAP products throughout the United States and Canada and is also a leading provider of selected commercial insurance coverages, primarily auto physical damage for dealers' vehicle inventory throughout the United States. The group has taken steps in recent years to expand into other lines of business and product services, and benefits from strategic alliances in non-auto markets. Ally Insurance also benefits from its leading innovative processes aligned with its ultimate parent, and its appropriate risk management capabilities.

The stable outlooks reflect AM Best's expectation that the group will maintain a balance sheet assessment in the strongest range over the intermediate term with adequate operating results contributing to surplus growth needed to support its growing book of business.

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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