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FOR IMMEDIATE RELEASE
OLDWICK - MAY 20, 2020 04:08 PM (EDT)
AM Best has revised the outlooks to stable from negative for the Long-Term Issuer Credit Ratings (Long-Term ICR) and affirmed the Financial Strength Rating (FSR) of B (Fair) and the Long-Term ICR of “bb+” of Anchor General Insurance Company (Anchor General) (San Diego, CA) and Pacific Star Insurance Company (Pacific Star) (Madison, WI), a subsidiary of Anchor General. The outlooks of the FSRs remain stable.
The Credit Ratings (ratings) of Anchor General reflect its balance sheet strength, which AM Best categorizes as adequate, as well as adequate operating performance, limited business profile and appropriate enterprise risk management (ERM). The ratings of Pacific Star reflect its balance sheet strength, which AM Best categorizes as very strong, as well as adequate operating performance, limited business profile, appropriate ERM, and rating drag due to its direct ownership by Anchor General.
Anchor General’s revised Long-Term ICR outlook to stable from negative is based on its increased balance sheet strength in recent years, driven by improved operating performance, policyholders’ surplus growth and reduced net premiums written. Pacific Star’s revised Long-Term ICR outlook to stable from negative is based on reduced ratings drag from its parent, Anchor General.
The management of Anchor General and Pacific Star has implemented numerous corrective measures and strategies in recent years, which included rate changes, agency management and risk mitigation initiatives. The impact of these changes has materially improved Anchor General’s and Pacific Star’s underwriting results, operating earnings, surplus position, along with underwriting leverage and risk-adjusted capitalization. These positive rating factors are partially offset by Anchor General’s and Pacific Star’s limited business profiles, primarily due to geographic and product concentration as predominantly California private passenger non-standard auto writers, which exposes both companies to market, regulatory, legislative and judicial risks.
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.