Best’s News & Research Service - November 25, 2008 03:39 PM (EST)
A.M. Best Affirms and Withdraws Ratings of the Alliance Mutual Insurance Company
OLDWICK, N.J. //BestWire// - A.M. Best Co. has affirmed the financial strength rating (FSR) of B+ (Good) and the issuer credit rating (ICR) of “bbb-”of the Alliance Mutual Insurance Company (Alliance) (Greensboro, NC). The outlook for all ratings has been revised to negative from stable.
The ratings reflect Alliance Mutual’s low underwriting leverage, long-standing local market presence and aggressive improvements to its underwriting fundamentals. These strengths, however, are severely tempered by the continued erosion of the company’s capital base driven by weak underwriting performance, an elevated expense structure, recent reserve strengthening and compounded by a business concentration in North Carolina, which makes the company susceptible to regulatory, economic, and judicial changes, as well as potential earnings and surplus setbacks from local storms and hurricanes. These factors support the company’s current outlook.
Subsequently, A.M. Best has withdrawn both ratings at the company’s request and assigned a category NR-4 to the FSR and an “nr” to the ICR.