A.M. Best Withdraws Ratings of Companion Property and Casualty Group Members
February 13 2015 - 11:18AM
Business Wire
A.M. Best has removed from under review with negative
implications and affirmed the financial strength rating of B++
(Good) and the issuer credit ratings of “bbb” of Companion
Property and Casualty Insurance Company and its subsidiaries,
Companion Commercial Insurance Company (both of Columbia,
SC) and Companion Specialty Insurance Company (District of
Columbia), collectively referred to as Companion Property and
Casualty Group (Companion). The outlook assigned to both
ratings is stable. Concurrently, A.M. Best has withdrawn the
ratings in response to Companion’s request to no longer participate
in A.M. Best's interactive rating process. Companion is ultimately
owned by Enstar Group Limited [Nasdaq:ESGR].
The ratings for the members of Companion are based on the
consolidation of Companion Property and Casualty Insurance Company
and its 100% reinsured subsidiaries, Companion Commercial Insurance
Company and Companion Specialty Insurance Company. The ratings
reflect the group's adequate risk-adjusted capitalization at the
current rating level, overall improvement in the projected balance
sheet strength as the company de-levers its risks and the expertise
and support of Companion's new ultimate parent, Enstar Group
Limited.
Somewhat offsetting these positive rating factors are the
substantial underwriting and operating losses that have occurred
over the past four years and the removal of rating enhancement that
was afforded to the group members as a result of the explicit and
implicit support provided by Blue Cross Blue Shield of South
Carolina, which was removed in August 2014.
Since 2011, results have been adversely impacted by poorly
performing programs, severe weather-related events, goodwill
impairments and several other one-time charges driven, in part, by
management's review of the group's operations. In addition,
significant reserve strengthening occurred in 2013 as a result of
an overhaul of the reserving process in order to more effectively
evaluate the group's business.
The methodology used in determining these ratings is Best’s
Credit Rating Methodology, which provides a comprehensive
explanation of A.M. Best’s rating process and contains the
different rating criteria employed in the rating process. Best’s
Credit Rating Methodology can be found at
www.ambest.com/ratings/methodology.
Key insurance criteria reports utilized:
• Catastrophe Analysis in A.M. Best Ratings
• Insurance Holding Company and Debt Ratings
• Rating Members of Insurance Groups
• Risk Management and the Rating Process for Insurance
Companies
• The Treatment of Terrorism Risk in the Rating Evaluation
• Understanding BCAR for Property/Casualty Insurers
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 visit A.M.
Best’s Ratings & Criteria Center.
A.M. Best Company is the world's oldest and most
authoritative insurance rating and information source. For more
information, visit www.ambest.com.
Copyright © 2015 by A.M. Best Company,
Inc. ALL RIGHTS RESERVED.
A.M. Best Company, Inc.Gale Guerra, 908-439-2200, ext.
5069Senior Financial
Analystgale.guerra@ambest.comorPeter Dickey,
908-439-2200, ext. 5053Assistant Vice
Presidentpeter.dickey@ambest.comorChristopher
Sharkey, 908-439-2200, ext. 5159Manager, Public
Relationschristopher.sharkey@ambest.comorJim Peavy,
908-439-2200, ext. 5644Assistant Vice President, Public
Relationsjames.peavy@ambest.com
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