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FOR IMMEDIATE RELEASE
OLDWICK - SEPTEMBER 19, 2019 02:06 PM (EDT)
AM Best has revised the outlooks to negative from stable and affirmed the Financial Strength Rating of B+ (Good) and the Long-Term Issuer Credit Rating of “bbb-” of Casualty Underwriters Insurance Company (CUIC) (Salt Lake City, UT).
The Credit Ratings (ratings) reflect CUIC’s balance sheet strength, which AM Best categorizes as strong, as well as its adequate operating performance, limited business profile and marginal enterprise risk management.
The negative outlooks on the ratings reflect CUIC’s declining balance sheet strength and deteriorating operating performance, which result from the increased retention in its private passenger automobile book. Although CUIC’s current risk-adjusted capitalization is still supportive of its current rating level, it declined after CUIC increased its retention on its auto book to 50% from 20% as of Jan. 1, 2019. Additionally, the increased retention has reduced the amount of ceding commissions CUIC receives, which has increased the company’s expense and combined ratios. Therefore, AM Best expects that future underwriting profitability for CUIC’s auto book will deteriorate from past results.
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 credit rating agency and information provider with an exclusive focus on the insurance industry.