JUNE 13, 2019 10:10 AM (EDT)
AM Best Downgrades Issuer Credit Ratings of California Casualty Group Members
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FOR IMMEDIATE RELEASE
OLDWICK - JUNE 13, 2019 10:10 AM (EDT)
AM Best has downgraded the Long-Term Issuer Credit Ratings (Long-Term ICR) to “bbb” from “bbb+” and affirmed the Financial Strength Rating (FSR) of B++ (Good) of The California Casualty Indemnity Exchange (San Mateo, CA) and its wholly owned subsidiaries: California Casualty General Insurance Company of Oregon (Portland, OR), California Casualty & Fire Insurance Company (San Mateo, CA) and California Casualty Insurance Company (Portland, OR). All of these companies comprise the California Casualty Group (California Casualty). The outlook of the FSR has been revised to negative from stable, while the outlook of the Long-Term ICRs remains negative.
The Credit Ratings (ratings) reflect California Casualty’s balance sheet strength, which AM Best categorizes as very strong, as well as its marginal operating performance, neutral business profile and marginal enterprise risk management.
The rating actions reflect a material decline in California Casualty’s capital position, resulting from less-than-optimal underwriting and operating results over several years. The group’s adverse performance has been amplified by increased weather and catastrophe losses. While capital is supportive on a risk-adjusted basis currently, certain balance sheet measures also are deteriorating as a product of operating performance decline. The ratings capture the benefits of the group’s extensive affiliations with various affinity trade groups that have provided it with a stable and mature policyholder base and excellent business persistency. The negative outlooks reflect AM Best’s concerns with the group’s ability to improve its underwriting performance and the ultimate impact that it may have on its risk-adjusted capitalization.
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.
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