Best’s News & Research Service - January 10, 2023 05:26 PM (EST)
AM Best Downgrades Credit Ratings of California Insurance Company and Its Affiliates; Revises Under Review Status
- January 10, 2023 05:26 PM (EST)
Oldwick //BestWire// - AM Best has downgraded the Financial Strength Rating (FSR) to A- (Excellent) from A (Excellent) and the Long-Term Issuer Credit Ratings (Long-Term ICRs) to “a-” (Excellent) from “a” (Excellent) of California Insurance Company (Foster City, CA), Continental Indemnity Company, Illinois Insurance Company, Texas Insurance Company (Dallas, TX), Pennsylvania Insurance Company, Oklahoma Property and Casualty Insurance Company (Oklahoma City, OK) and Florida Casualty Insurance Company (Sarasota, FL). All companies collectively are referred to as North American Casualty Group (NAC) and are domiciled in Santa Fe, NM, unless otherwise specified. Concurrently, AM Best has maintained the under review status on these Credit Ratings (ratings) and revised the implication status to developing from negative.
At the same time, AM Best has withdrawn the FSR of A (Excellent) and the Long-Term ICR of “a” (Excellent) of Catlin Specialty Insurance Company (Catlin) (Oklahoma City, OK). At the time of the withdrawal, these ratings were under review with negative implications.
The ratings reflect NAC’s balance sheet strength, which AM Best assesses as very strong, as well as its strong operating performance, limited business profile and marginal enterprise risk management (ERM).
The downgrade reflects a deterioration in NAC’s ERM assessment. This action is a result of increased scrutiny regarding the group’s risk management capabilities in relation various operational risks that have arose in recent years. Despite these concerns, the group’s balance sheet strength and operating performance continues to hold on a statutory basis. The under review with developing implications status will remain on the group’s ratings until the sufficient information becomes available to AM Best that will allow an updated evaluation of NAC’s ERM assessment.
AM Best has withdrawn the ratings of Catlin as the company is no longer a risk-bearing entity, nor is it part of any reinsurance or pooling agreement that would warrant rating support from another entity. AM Best currently does not conduct ratings on non-risk-bearing entities. If Catlin were to become a risk-bearing entity, the company would potentially be eligible to participate in AM Best’s interactive rating process.
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 Guide to Best’s Credit Ratings. For information on the proper use of Best’s Credit Ratings, Best’s Performance Assessments, Best’s Preliminary Credit Assessments and AM Best press releases, please view Guide to Proper Use of Best’s Ratings & Assessments.
AM Best is a global credit rating agency, news publisher and data analytics provider specializing in the insurance industry. Headquartered in the United States, the company does business in over 100 countries with regional offices in London, Amsterdam, Dubai, Hong Kong, Singapore and Mexico City.