CONTACTS:
FOR IMMEDIATE RELEASE
OLDWICK, N.J. - APRIL 23, 2012 12:00 AM (EDT)
A.M. Best Co. has revised the outlook to negative from stable and affirmed the financial strength rating of A+ (Superior) and the issuer credit ratings of “aa-” of the Greater New York Group (GNY), which includes the operations of Greater New York Mutual Insurance Company and its three wholly owned subsidiaries: Insurance Company of Greater New York, Strathmore Insurance Company and GNY Custom Insurance Company (Phoenix, AZ). All companies are headquartered in New York, NY, except where noted.
The negative outlook reflects the deterioration in GNY’s underwriting results and its weakened operating return measures in 2010 and 2011, which resulted in GNY's performance on these two measures falling below that of the commercial casualty composite. In 2010 and 2011, GNY’s results were significantly impacted by weather-related losses, most notably winter storms, tornados and Hurricane Irene. Although management has taken corrective actions, which include rate increases, the reduction of exposures in catastrophe prone regions and the implementation of both ice dam and wind/hail deductibles, the ability of these actions to improve results in the near term given GNY’s ongoing competition in the commercial line segment and the severe weather patterns experienced in recent years is uncertain.
The affirmation of the ratings recognizes GNY’s excellent level of capitalization, conservative balance sheet and well-established local market presence as a leading writer of commercial multi-peril business for habitational, light industrial, office building and restaurant risks, primarily within the Northeast region. GNY benefits from its conservative operating philosophy, strong reputation, regional expertise and long-standing relationships with its insureds and producers.
Negative rating actions may occur if there is a continued decline in GNY’s operating results and/or considerable deterioration in its capital strength as measured by Best’s Capital Adequacy Ratio.
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”; “Rating Members of Insurance Groups”; “The Treatment of Terrorism Risk in the Rating Evaluation”; and “Catastrophe Analysis in A.M. Best Ratings.” Best’s Credit Rating Methodology can be found at www.ambest.com/ratings/methodology.
Founded in 1899, A.M. Best Company is the world’s oldest and most authoritative insurance rating and information source.