MARCH 30, 2017 11:59 AM (EDT)
A.M. Best Withdraws Credit Ratings for Members of American Independent Companies Pool
FOR IMMEDIATE RELEASE
OLDWICK - MARCH 30, 2017 11:59 AM (EDT)
The rating actions reflect the significant strengthening of the group’s loss reserves related to its non-standard auto book of business in each of the past three years, which substantially exceeded the group’s projections and expectations. The reserve action produced a downturn in AIC’s operating results in 2014 – 2016, and has resulted in a significant reduction in the group’s policyholder surplus in recent years. As a result, the group’s overall risk-adjusted capitalization has declined substantially. The negative outlooks on the ratings reflect the uncertainty of the company’s corrective actions to reverse adverse reserve development. If adverse reserve development continues, the potential exists for lower overall risk-adjusted capitalization, as measured by Best’s Capital Adequacy Ratio (BCAR).
The FSR has been downgraded to C+ (Marginal) from B+ (Good) and the Long-Term ICR to “b-” from “bbb-”, each with a negative outlook, and withdrawn for the following members of the American Independent Companies pool:
This press release relates to Credit Ratings that have been published on A.M. 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 A.M. 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.
A.M. Best is the world’s oldest and most authoritative insurance rating and information source.