NOVEMBER 19, 2019 04:03 PM (EST)
AM Best Places Credit Ratings of Weston Insurance Company Under Review With Negative Implications
FOR IMMEDIATE RELEASE
OLDWICK - NOVEMBER 19, 2019 04:03 PM (EST)
The Credit Ratings (ratings) reflect Weston’s balance sheet strength, which AM Best categorizes as adequate, as well as its marginal operating performance, limited business profile and appropriate enterprise risk management.
The under review with negative implications status follows AM Best’s latest review of Weston and its ultimate parent, Weston Insurance Holdings Corporation. Historically, the holding company assessment, which is embedded within the overall balance sheet assessment of the insurance company, has had a negative impact due to elevated financial leverage driven by a structure that includes senior debt and preferred stock. At the most recent annual review, the financial leverage had increased to a greater level that was outside of AM Best’s expectations, which adds more profound negative pressure on the ratings. While management has communicated near-term action plans to reduce financial leverage through partial payment of senior debt and replacement of preferred stock with common shares, these actions involve execution risk. The ratings will remain under review until management finalizes and executes these plans, and AM Best evaluates the financial impact on the holding company.
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, news publisher and data provider specializing in the insurance industry. The company does business in more than 100 countries. Headquartered in Oldwick, NJ, AM Best has offices in cities around the world, including London, Amsterdam, Dubai, Hong Kong, Singapore and Mexico City.