AM Best


A.M. Best Revises Outlook to Negative for Global Liberty Insurance Company of New York


CONTACTS:


W. Dolson Smith, CFA
Senior Financial Analyst
(908) 439-2200, ext. 5379
w.dolson.smith@ambest.com

Michael J. Lagomarsino, CFA
Assistant Vice President
(908) 439-2200, ext. 5810
michael.lagomarsino@ambest.com


Christopher Sharkey
Manager, Public Relations
(908) 439-2200, ext. 5159
christopher.sharkey@ambest.com

Jim Peavy
Assistant Vice President, Public Relations
(908) 439-2200, ext. 5644
james.peavy@ambest.com

FOR IMMEDIATE RELEASE

OLDWICK - AUGUST 08, 2014 12:35 PM (EDT)
A.M. Best has revised the outlook to negative from stable and affirmed the financial strength rating of B+ (Good) and the issuer credit rating of "bbb-" of Global Liberty Insurance Company of New York (Global) (Melville, NY).

The negative outlook reflects Global's underwriting and overall operating losses in 2013, in part due to unfavorable prior year loss reserve development, a current lower level of risk-adjusted capitalization largely driven by greater underwriting leverage, above-average growth and a decline in surplus in 2013, as well as the greater uncertainty of its executing on its business plans.

Global remains focused on achieving steady profitable growth by following well-maintained underwriting guidelines. Currently, the company primarily writes commercial auto liability and extended no-fault coverages for the for-hire-livery vehicle market in the New York City metropolitan area, principally insuring black and luxury cars and limousines, while not insuring the higher-risk taxi business and also limiting car service business. Minimal physical damage coverage also is written for select classes of its auto business.

Global is somewhat challenged with above-average risks, including execution of its business plans and limited product and geographic diversification. In 2013, the company did not renew its quota share reinsurance, which substantially lowered its dependence on reinsurers, but significantly increased underwriting leverage measures. Effective January 1, 2014, Global again purchased quota share reinsurance to mitigate pressure on its risk-adjusted capital and, more recently, has taken additional actions to improve underwriting performance.

Factors that could lead to negative rating actions include a lack of underwriting discipline that results in the company's operating performance falling short of A.M. Best's expectations, or should there be a material decline in its risk-adjusted capitalization.

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.

A.M. Best Company is the world's oldest and most authoritative insurance rating and information source.


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AMB# Company Name
012498 Global Liberty Ins Co of New York