DECEMBER 12, 2012 12:00 AM (EST)

A.M. Best Assigns Ratings to American Millennium Insurance Company

Fred Eslami
Senior Financial Analyst
(908) 439-2200, ext. 5406

Steven Chirico, CPA
Assistant Vice President
(908) 439-2200, ext. 5087

Rachelle Morrow
Senior Manager, Public Relations
(908) 439-2200, ext. 5378

Jim Peavy
Assistant Vice President, Public Relations
(908) 439-2200, ext. 5644


OLDWICK, N.J. - DECEMBER 12, 2012 12:00 AM (EST)
A.M. Best Co. has assigned a financial strength rating (FSR) of B+ (Good) and an issuer credit rating (ICR) of “bbb-” to American Millennium Insurance Company (AMIC) (Bridgewater, NJ). The outlook assigned to both ratings is stable.

The ratings of AMIC reflect its good risk-adjusted capitalization, strong projected operating performance, adequate liquidity position, expanded risk management strategy and practices, conservative investment strategy and its management team’s extended experience in the industry. The ratings also recognize the company's presence in a unique market.

Partially offsetting these positive rating factors are AMIC’s limited geographic footprint and the inherent risk associated with commercial auto writing policies covering taxi, truck and limousine liability coverages. These remain the main risk factor as the company seeks to achieve the targets set in its projections. These risks, however, have been mitigated to some extent by AMIC planning to expand its geographic presence, adhering to strict underwriting and risk management guidelines and continuously monitoring the performance of each line of business and strong risk mitigation practices.

AMIC is organized under the insurance laws of the State of New Jersey, where it commenced business in December 2001. AMIC is now a specialty writer that has focused on writing small, niche program business and other small risks, primarily focused on commercial automobile (taxi, limo, short-haul trucking), auto physical damage and authorized workers’ compensation. On October 20, 2011, Citadel Reinsurance Company Limited (which currently has an FSR of A- [Excellent] and an ICR of “a-”, and has a stable outlook), acquired 100% of AMIC’s outstanding stock through its Delaware holding company, Citadel Risk Holdings, in a transaction approved by the New Jersey Department of Banking and Insurance.

A.M. Best views AMIC’s management and corporate strategy as a strength to the ratings, given the conservative risk limits on its underwriting, operational goals and transparency. A.M. Best views the company’s risk management practices as strong given its impact on conservative risk culture, defined risk controls and optimizing its capital and surplus.

A.M. Best expects future operating performance to be stable, but strong, and the stable earnings profile should further support the company to control its growth and business writing, which is consistent with its capital and surplus position.

AMIC's ratings and outlook are not expected to be upgraded within the next 12-24 months as its operating performance and capital position already have been considered in the rating process. A.M. Best could downgrade the ratings and/or revise the outlook if AMIC’s Best's Capital Adequacy Ratio (BCAR) score declines, operating performance and risk profile deteriorate, insured losses deplete capital, or significant changes and turnover occur in the management team and/or risk management controls and tolerances.

A.M. Best remains the leading rating agency of alternative risk transfer entities, with more than 200 such vehicles rated in the United States and throughout the world.

For current Best's Credit Ratings and independent data on the captive and alternative risk transfer insurance market, please visit Best's Captive Center.

The methodology used in determining these ratings is Best’s Credit Rating Methodology, which provides a comprehensive explanation of A.M. Best’s rating process and contains the different rating criteria employed in the rating process. Key criteria utilized include: “Risk Management and the Rating Process for Insurance Companies”; “Understanding BCAR for Property/Casualty Insurers”; and “Alternative Risk Transfer (ART).” Best’s Credit Rating Methodology can be found at

Founded in 1899, A.M. Best Company is the world’s oldest and most authoritative insurance rating and information source.

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