Rating agency: First Acceptance needs to stay disciplined

The analysts at debt ratings group A.M. Best have reiterated their opinion of local auto insurer First Acceptance. But Charles Huber says the company's work to reposition itself — it has been closing offices and changing its pricing structure — brings with it some risk given the soft market for rates.

However, capitalization is expected to weaken; although, should remain supportive of the ratings as the group’s new management initiates an aggressive growth plan over the next few years. A.M. Best is concerned that earnings projections will be challenged if pricing, risk selection and reserving discipline are not maintained, along with growth, during the current competitive, soft non-standard auto market and low interest rate environment.