Press Release - JANUARY 10, 2019

AM Best Revises Issuer Credit Rating Outlook to Negative for Members of Atain Insurance Companies

 Edward J. Zonenberg
Senior Financial Analyst
+1 908 439 2200, ext. 5135

Daniel J. Ryan
Senior Director
+1 908 439 2200, ext. 5325
Christopher Sharkey
Manager, Public Relations
+1 908 439 2200, ext. 5159

Jim Peavy
Director, Public Relations
+1 908 439 2200, ext. 5644


AM Best has revised the outlook to negative from stable for the Long-Term Issuer Credit Rating (Long-Term ICR) and affirmed the Financial Strength Rating of A (Excellent) and the Long-Term ICRs of “a+” of Atain Specialty Insurance Company and Atain Insurance Company, collectively referred to as Atain Insurance Companies (AIC). The outlook of the FSR remains stable. Both companies are headquartered in Farmington Hills, MI.

The Credit Ratings (ratings) reflect AIC’s balance sheet strength, which AM Best categorizes as strongest, as well as its strong operating performance, neutral business profile and appropriate enterprise risk management.

The revised Long-Term ICR outlook is the result of AIC’s subpar operating results in 2016 and 2017, which ended the group’s enviable streak of net underwriting profit and placed the group’s overall profitability more in line with its peers. Despite the recent underwriting setbacks, AIC’s risk-adjusted capitalization remains at the strongest level in each of the return periods. Lastly, AIC derives benefits from its affiliation with AJK Enterprises in terms of resources and services, as well as its access to Burns & Wilcox, Ltd., one of the largest independently owned insurance wholesalers in the United States.

As a member of AJK Enterprises, AIC has the ability to participate on mature programs produced by its affiliated wholesaler, which over the years has proven to be profitable and a driver of its historical operating profitability. AIC also benefited from synergies and substantial expense efficiencies afforded by the AJK group.

These favorable ratings factors are offset partially by the aforementioned less-than-favorable operating performance experienced by AIC in recent years, a higher expense ratio that is more akin to its peers and the modest, albeit adverse, reserve development reported in accident years 2012 and 2013.

AIC is formed by the consolidation of Atain Specialty Insurance Company and its wholly owned subsidiary, Atain Insurance Company. Both companies participate in an intercompany reinsurance pooling agreement.

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.

AM Best is a global rating agency and information provider with a unique focus on the insurance industry.

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