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FOR IMMEDIATE RELEASE
OLDWICK - NOVEMBER 19, 2021 08:53 AM (EST)
AM Best has placed under review with negative implications the Financial Strength Rating of A (Excellent) and the Long-Term Issuer Credit Rating of “a” (Excellent) of Golden Bear Insurance Company (Golden Bear) (Stockton, CA).
The Credit Ratings (ratings) of Golden Bear were placed under review with negative implications reflecting surplus erosion observed in 2021, which management has communicated remedial action plans in response of. Through the first nine months of 2021, the company recorded roughly $12 million in adverse loss reserve development, primarily related to casualty claims that have been impacted unfavorably by social inflation factors, as well as higher-than-expected loss activity in certain programs and geographies. The unfavorable development is the primary driver for volatility leading to an 8.2% ($6 million) decline in surplus during the year. Management has outlined plans to replenish capital losses in the near term, which are expected to strengthen the company’s risk-adjusted capitalization, as measured by Best’s Capital Adequacy Ratio (BCAR), and thus overall balance sheet strength. The ratings will remain under review until management executes the intended actions, and AM Best evaluates the impact on Golden Bear.
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 Guide to Best’s Credit Ratings. For information on the proper use of Best’s Credit Ratings, Best’s Preliminary Credit Assessments and AM Best press releases, please view Guide to Proper Use of Best’s Ratings & Assessments.
AM Best is a global credit rating agency, news publisher and data analytics provider specializing in the insurance industry. Headquartered in the United States, the company does business in over 100 countries with regional offices in London, Amsterdam, Dubai, Hong Kong, Singapore and Mexico City.