MARCH 25, 2021 04:57 PM (EDT)
AM Best Withdraws Credit Ratings of American Capital Assurance Corp
|Jeffrey Stary, CPCU, ARe, ARM|
+1 908 439 2200, ext. 5689
Raymond Thomson, CPCU, ARe, ARM
+1 908 439 2200, ext. 5621
Manager, Public Relations
+1 908 439 2200, ext. 5159
+1 908 439 2200, ext. 5644
FOR IMMEDIATE RELEASE
OLDWICK - MARCH 25, 2021 04:57 PM (EDT)
AM Best has removed from under review with negative implications and downgraded the Financial Strength Rating to D (Poor) from C (Weak) and the Long-Term Issuer Credit Rating to “c” from “ccc+” of American Capital Assurance Corp (ACAC) (St. Petersburg, FL). The outlook assigned to these Credit Ratings is negative. Concurrently, AM Best has withdrawn the ratings as the company has requested to no longer participate in AM Best’s interactive rating process.
The ratings reflect ACAC’s balance sheet strength, which AM Best assesses as very weak, as well as its marginal operating performance, very limited business profile and marginal enterprise risk management.
These rating actions result from net underwriting losses from multiple severe weather events in the second half of 2020, particularly in Louisiana, as well as losses from the Texas Freeze weather event in February 2021, which led to significant surplus loss and a severe negative impact to ACAC’s risk-adjusted capitalization on a standard and catastrophe-stressed basis, as measured by Best’s Capital Adequacy Ratio (BCAR). These diminished operating results are also indicative of product and geographic concentration concerns in the commercial property insurance book of business in Florida, Texas and Louisiana, calling into question the soundness and fundamentals of ACAC’s enterprise risk management program.
In response to these developments, ACAC management has communicated near-term strategic initiatives that are designed to immediately improve risk-adjusted capitalization and stabilize operating 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 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 London, Amsterdam, Dubai, Hong Kong, Singapore and Mexico City.