Press Release - MARCH 12, 2019

AM Best Downgrades Credit Ratings of Saucon Insurance Company


CONTACTS:
 Steven DeLosa
Financial Analyst
+1 908 439 2200, ext. 5969
steven.delosa@ambest.com

Michelle Baurkot
Director
+1 908 439 2200, ext. 5314
michelle.baurkot@ambest.com
Christopher Sharkey
Manager, Public Relations
+1 908 439 2200, ext. 5159
christopher.sharkey@ambest.com

Jim Peavy
Director, Public Relations
+1 908 439 2200, ext. 5644
james.peavy@ambest.com

FOR IMMEDIATE RELEASE

OLDWICK - MARCH 12, 2019
AM Best has downgraded the Financial Strength Rating to B++ (Good) from A- (Excellent) and the Long-Term Issuer Credit Rating to “bbb+” from “a-” of Saucon Insurance Company (Saucon) (Bethlehem, PA). The outlook of these Credit Ratings (ratings) remains stable.

The ratings reflect Saucon’s balance sheet strength, which AM Best categorizes as very strong, as well as its adequate operating performance, very limited business profile and appropriate enterprise risk management.

The rating downgrades reflect a revision in AM Best’s assessment of Saucon’s business profile to very limited from limited, given the ongoing moratorium on new business since 2008 and continued erosion of perpetual policies in force. While a holding company structure was developed effective Jan.1, 2018, there are no immediate plans to expand the scope of operations. Any change in strategic direction also would require additional expertise to properly evaluate new risks to the company.

As a perpetual homeowner writer, Saucon does not recognize policy deposits as premium revenue. Therefore, the evaluation of operating performance and the company’s ability to generate capital appreciation is focused on total investment returns. In recent years, investment income and capital gains have been volatile, as reflected in the company’s total return on invested assets and equity measures. AM Best expects continued strain on Saucon’s investment portfolio as a result of the low interest rate environment and volatile equity market.

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 Understanding Best’s Credit Ratings. For information on the proper media use of Best’s Credit Ratings and AM Best press releases, please view Guide for Media - Proper Use of Best’s Credit Ratings and AM Best Rating Action Press Releases.

AM Best is a global rating agency and information provider with a unique focus on the insurance industry.


Related Companies

For information about each company, including the Best's Credit Reports, group members (where applicable) and news stories, click on the company name. An additional purchase may be required.

AMB# Company Name
003235 Saucon Insurance Company