Best’s News & Research Service - January 30, 2019 04:21 PM (EST)
AM Best Downgrades Issuer Credit Rating of ACMAT Corporation and ACSTAR Insurance Company
- January 30, 2019 04:21 PM (EST)
Oldwick //BestWire// - AM Best has downgraded the Long-Term Issuer Credit Rating (Long-Term ICR) to “bbb” from “bbb+” of ACMAT Corporation (ACMAT) (Farmington, CT) [OTC Market: ACMT]. Concurrently, AM Best has downgraded the Long-Term ICR to “a” from “a+” and affirmed the Financial Strength Rating (FSR) of A (Excellent) of ACMAT’s wholly owned subsidiary, ACSTAR Insurance Company (ACSTAR) (Chicago, IL). The outlook of the Long-Term ICRs has been revised to stable from negative, while the outlook of the FSR remains stable.
The Credit Ratings (ratings) reflect ACSTAR’s balance sheet strength, which AM Best categorizes as very strong, as well as its strong operating performance, limited business profile and appropriate enterprise risk management.
The rating actions are based on a material reduction in ACSTAR’s premiums in recent years, which has led to a diminished business profile. In addition, while results have historically benefited from management’s niche specialty orientation in the surety sector, prudent underwriting discipline and a conservative loss reserving philosophy, the decline in premiums has resulted in narrowed underwriting results in recent years. The negative trend in premiums partly reflects highly competitive market conditions in the niche.
Negative rating actions could occur if operating results show a negative trend or if risk-adjusted capitalization materially weakens.
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 Understanding 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.
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