AM Best Withdraws Credit Ratings of Safepoint Insurance Company
- June 24, 2021 10:34 AM (EDT)
Oldwick //BestWire// - AM Best has removed from under review with negative implications and downgraded the Financial Strength Rating to C++ (Marginal) from B- (Fair) and the Long-Term Issuer Credit Rating to “b” (Marginal) from “bb-” (Fair) of Safepoint Insurance Company (Safepoint) (Temple Terrace, FL). The outlook assigned to these Credit Ratings (ratings) is negative. Concurrently, AM Best has withdrawn these ratings as the company has requested to no longer participate in AM Best’s interactive rating process.
The ratings reflect Safepoint’s balance sheet strength, which AM Best assesses as weak, as well as its marginal operating performance, limited business profile and appropriate enterprise risk management (ERM).
The rating downgrades reflect negative pressure from the holding company, Safepoint Holdings, Inc., which is embedded within the insurance company’s overall balance sheet strength assessment. The organization’s consolidated capital has eroded, causing the financial leverage related to outstanding debt to increase above AM Best’s guidelines. As a result, the assessment of the holding company has been lowered to negative from neutral.
The negative outlooks reflect AM Best’s concern pertaining to Safepoint’s ERM program and its ability to appropriately mitigate current and emerging risks associated with the Florida market given the company’s observed volatility in operating performance and surplus erosion.
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 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 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.