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FOR IMMEDIATE RELEASE
OLDWICK - AUGUST 19, 2016 10:45 AM (EDT)
A.M. Best has downgraded the financial strength rating to A- (Excellent) from A (Excellent) and the issuer credit rating to “a-” from “a+” for American Capital Assurance Corp (ACAC) (St. Petersburg, FL). These rating actions follow the recent transaction between ARX Holding Corp (ARX) and Ark Royal Holding, LLC (Ark Royal), resulting in the transfer of ownership of ACAC from ARX to Ark Royal. The outlook for each rating is stable.
Previously, under the ownership of ARX and The Progressive Corporation, ACAC was afforded rating enhancement based upon the benefits derived from being part of that organization. The rating downgrades are solely reflective of the change in ownership post transaction.
ACAC’s positive rating attributes include consistent profitable operating performance and solid risk-adjusted capitalization, as well as expertise in the small commercial lines segments in Florida and other states. While ACAC’s management has changed, its operations and business focus remain the same, and ACAC will continue to benefit from certain contractual support relationships with ARX. Furthermore, Ark Royal senior management is well seasoned and has managed profitable insurance operations in the challenging Florida marketplace.
Regarding future rating movement, if profitable underwriting trends continue leading to further strengthening in risk-adjusted capitalization, forward rating movement would be considered. Conversely, if operating results were to deteriorate leading to operating losses and weakening in risk-adjusted capitalization, pressure on the ratings would be considered.
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 see A.M. Best’s Recent Rating Activity web page.
A.M. Best Company is the world’s oldest and most authoritative insurance rating and information source.