A.M. Best Co. has revised the outlook to negative from stable and
affirmed the financial strength rating of B++ (Good) and issuer credit
rating of bbb of Star Casualty Insurance Company (Star
Casualty) (Coral Gables, FL).
“Risk Management and the Rating Process for
Insurance Companies”
The negative outlook reflects the significant challenges Star Casualtys
management will encounter as it continues to execute its strategies to
return to underwriting profitability in view of the current market and
economic conditions in its primary state of operations.
The ratings recognize that Star Casualty has maintained an adequate
level of risk-adjusted capitalization, its five-year positive operating
income and its strong market presence in Florida, where management
possesses extensive knowledge of the non-standard automobile business.
In addition, Star Casualty has experienced erratic loss reserve
development and persistent underwriting losses that have resulted in
inconsistent operating income and an increase in reinsurance dependency.
The principal methodology used in determining these ratings is Bests
Credit Rating Methodology -- Global Life and Non-Life Insurance Edition,
which provides a comprehensive explanation of A.M. Bests rating process
and highlights the different rating criteria employed. Additional key
criteria utilized include: Risk Management and the Rating Process for
Insurance Companies; Understanding BCAR for Property/Casualty
Insurers; Natural Catastrophe Stress Test Methodology and
Catastrophe Analysis in A.M. Best Ratings. Methodologies can be found
at www.ambest.com/ratings/methodology.
Founded in 1899, A.M. Best Company is a global full-service credit
rating organization dedicated to serving the financial and health care
service industries, including insurance companies, banks, hospitals and
health care system providers. For more information, visit www.ambest.com.
Source: Business Wire
