Best’s News & Research Service - May 12, 2016 09:21 AM (EDT)
A.M. Best Withdraws Ratings of Peachtree Casualty Insurance Company
- May 12, 2016 09:21 AM (EDT)
Oldwick //BestWire// - A.M. Best has downgraded the financial strength rating (FSR) to C- (Weak) from C (Weak) and the issuer credit rating (ICR) to “ccc-” from “ccc” of Peachtree Casualty Insurance Company (Peachtree) (Longwood, FL). The outlook for the FSR has been revised to stable from negative, while the outlook for the ICR remains negative. Concurrently, A.M. Best has withdrawn the ratings in response to the company’s request to no longer participate in A.M. Best’s interactive rating process.
The ratings downgrade is the result of the reduction in Peachtree’s risk-adjusted capitalization following recent volatility in its underwriting performance. Significant underwriting losses in 2015 contributed to the sharp decline in Peachtree’s policyholders’ surplus, which resulted in elevated underwriting leverage measures and a material weakening of its risk-adjusted capitalization. The operating losses were driven by adverse loss experience in Texas and Georgia, as well as increased claims overhead and underwriting expenses. Furthermore, Peachtree recently received a capital infusion from its parent company in the form of a surplus note, which tempered the impact that the unfavorable results had on policyholders’ surplus.
The negative outlooks reflect the potential for continued operating losses and the uncertainty that management’s strategies and initiatives will return the company to operating profitability over the intermediate term.
This press release relates to rating(s) 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.
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