Best’s News & Research Service - January 18, 2018 09:14 AM (EST)
A.M. Best Revises Outlooks to Negative for Standard Casualty Company
- January 18, 2018 09:14 AM (EST)
Oldwick //BestWire// - A.M. Best has revised the outlooks to negative from stable and affirmed the Financial Strength Rating of A- (Excellent) and the Long-Term Issuer Credit Rating of “a-” of Standard Casualty Company (Standard Casualty) (New Braunfels, TX). Standard Casualty is a subsidiary of Cavco Industries, Inc. (Cavco) [NASDAQ: CVCO], a leading manufacturer and marketer of factory built homes.
The Credit Ratings (ratings) reflect Standard Casualty’s balance sheet strength, which A.M. Best categorizes as very strong, as well as its adequate operating performance, neutral business profile and appropriate enterprise risk management.
The revised outlooks are based on the deterioration in the financial performance of Standard Casualty observed in recent years driven by frequent and severe weather-related losses (hail and hurricane). The most recent three-year period (2014-2017) produced unfavorable underwriting results, which have put downward pressure on Standard Casualty’s five-year average pre-tax returns on revenue and equity measures, which lag the personal property composite.
These negative rating factors are somewhat offset by Standard Casualty’s very strong balance sheet strength, vertical integration with its parent’s factory built home business, history of capital contributions from Cavco, local market knowledge and continued geographic diversification into New Mexico and Arizona markets.
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. For information on the proper media use of Best’s Credit Ratings and A.M. Best press releases, please view Guide for Media - Proper Use of Best’s Credit Ratings and A.M. Best Rating Action Press Releases.
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