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Best’s News & Research Service - June 08, 2016 03:08 PM (EDT)

A.M. Best Downgrades Ratings of Members of CSAA Insurance Group

  • June 08, 2016 03:08 PM (EDT)

Oldwick //BestWire// - A.M. Best has downgraded the financial strength rating (FSR) to A (Excellent) from A+ (Superior) and the issuer credit ratings (ICR) to “a+” from “aa-” of the members of CSAA Insurance Group (CSAA), which are CSAA Insurance Exchange (Walnut Creek, CA), CSAA Affinity Insurance Company (Glendale, AZ), CSAA General Insurance Company (Indianapolis, IN), CSAA Mid-Atlantic Insurance Company of New Jersey (Hamilton, NJ), CSAA Mid-Atlantic Insurance Company (Glendale, AZ) and CSAA Fire & Casualty Insurance Company (Indianapolis, IN). These companies operate under an inter-company pooling arrangement. The outlook for each of these ratings has been revised to stable from negative.

The downgrade reflects deterioration in CSAA’s underwriting results over several consecutive years, with sizable losses reported since 2013. CSAA’s underwriting results have been impacted by increased automobile claims frequency, most notably in California, where bodily injury and collision losses have risen. Additionally, results in 2015 were impacted by several severe California wildfires. As a result, CSAA’s performance metrics lag the private passenger standard auto and homeowners’ composite, as evidenced by its five-year average total returns on revenue and equity measures, which are negative.

Offsetting the negative rating factors is CSAA’s significant personal lines market presence in its selected territories and the benefits derived from its long association with AAA Northern California, Nevada & Utah, a member of the American Automobile Association, Inc. (AAA). The stable outlook reflects A.M. Best’s comfort level regarding CSAA’s solid risk-adjusted capital position driven by its conservative reserve position and modest underwriting leverage.

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.

A.M. Best is the world’s oldest and most authoritative insurance rating and information source.

Property And Liability Insurers California Automobile Insurers Financial Strength Press Release A.M. Best Rating Services, Inc. Insurance Issuer Credit Rating Best's Credit Rating Action Rating Event

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