Press Release - FEBRUARY 07, 2020

AM Best Downgrades Issuer Credit Ratings of Atain Insurance Companies’ Members


CONTACTS:
 Edward J. Zonenberg
Senior Financial Analyst
+1 908 439 2200, ext. 5135
edward.zonenberg@ambest.com

Daniel J. Ryan
Senior Director
+1 908 439 2200, ext. 5325
daniel.ryan@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 - FEBRUARY 07, 2020
AM Best has downgraded the Long-Term Issuer Credit Ratings (Long-Term ICR) to “a” from “a+” and affirmed the Financial Strength Rating (FSR) of A (Excellent) of Atain Specialty Insurance Company and Atain Insurance Company, collectively referred to as Atain Insurance Companies (AIC). The outlook of the Long-Term ICRs has been revised to stable from negative, while the outlook of the FSR remains stable. Both companies are headquartered in Farmington Hills, MI.

The Credit Ratings (ratings) reflect AIC’s balance sheet strength, which AM Best categorizes as strongest, as well as its adequate operating performance, neutral business profile and appropriate enterprise risk management.

While the FSR of A (Excellent) has been affirmed, the downgrade of the Long-Term ICRs is the result of AIC’s operating performance assessment being lowered to adequate from strong. This action follows the revision of the group’s Long-Term ICR outlook to negative from stable in January 2019 and is based on the insurer’s latest five-year average operating results, which no longer support the levels expected of a strong performance assessment, but is more in line with its peers; hence the adequate assessment.

AIC’s risk-adjusted capitalization and overall balance sheet assessment remains at the strongest level. Additionally, AIC benefits from its affiliation with AJK Enterprises in terms of resources and services, as well as access to Burns & Wilcox, Ltd., one of the largest independently owned insurance wholesalers in the United States.

As a member of AJK Enterprises, AIC has the ability to participate in mature programs produced by its affiliated wholesaler, which over the years have proven to be very successful. Over the years, AIC also has benefited from synergies and resources afforded by the AJK group. While some of these cost benefits are still available to Atain, an allocation of costs related to system enhancements and personnel resulted in higher-than-average allocated expenses for Atain in recent years.

AIC is formed by the consolidation of Atain Specialty Insurance Company and its wholly owned subsidiary, Atain Insurance Company. Both companies participate in an intercompany reinsurance pooling agreement.

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 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 analytics provider specializing in the insurance industry. Headquartered in the United States, the company does business in over 100 countries with regional offices in New York, London, Amsterdam, Dubai, Hong Kong, Singapore and Mexico City.


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