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FOR IMMEDIATE RELEASE
OLDWICK - MARCH 15, 2024 01:04 PM (EDT)
AM Best has placed under review with negative implications the Financial Strength Rating of B++ (Good) and the Long-Term Issuer Credit Rating of “bbb+” (Good) of Centerline Insurance Company (Centerline) (headquartered in Knoxville, TN).
The Credit Ratings (ratings) of Centerline were placed under review with negative implications based on the company’s significant surplus decline in year-end 2023. This was caused by its first underwriting loss, which resulted in an approximate 20% decrease in surplus, jeopardizing the company's balance sheet strength assessment in the near term. The cause of the loss was rooted in a single line of business, small fleet commercial auto liability. Management decided to wind down this line of business from a single managing general agent (MGA) in 2024, and prudently increased the level of incurred but not reported (IBNR) loss in an effort to ensure 2024, and forward operating results are not impacted. The measures were taken against potential material adverse development in the near to intermediate term.
The ratings will remain under review with negative implications pending AM Best's full analysis and assessment of Centerline's remedies for balance sheet strength and underwriting results in its recent transformation toward a fully regulated commercial insurance company from a captive.
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.