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FOR IMMEDIATE RELEASE
OLDWICK - MARCH 10, 2017 12:12 PM (EST)
A.M. Best has downgraded the Financial Strength Rating (FSR) to B+ (Good) from B++ (Good) and the Long-Term Issuer Credit Rating (Long-Term ICR) to “bbb-” from “bbb” of Anchor General Insurance Company (Anchor General) (San Diego, CA). The outlooks of these Credit Ratings (ratings) remain negative. Concurrently, A.M. Best has revised the outlooks to negative from stable and affirmed the FSR of B+ (Good) and Long-Term ICR of “bbb-” of Pacific Star Insurance Company (Pacific Star) (Madison, WI), a subsidiary of Anchor General.
The downgrade of Anchor General’s ratings is based on the recent deterioration in its underwriting results, operating performance, statutory surplus and risk-adjusted capitalization. This deterioration was driven by an influx of new business growth, unfavorable California non-standard private passenger auto loss trends and Texas storm losses. The outlook revision to negative from stable for Pacific Star was based on the downgrade of its parent, Anchor General, to a Long-Term ICR of “bbb-” with a negative outlook.
Anchor General maintains adequate risk-adjusted capitalization, despite the premium and surplus fluctuations over the past five years. Management has recently implemented numerous corrective measures and strategies, which include rate changes, agency management and risk mitigation initiatives. In addition, in 2015, Anchor General received a $3.5 million capital contribution from its parent to support growth in net premiums written.
This press release relates to Credit Ratings 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. For additional information regarding the use and limitations of Credit Rating opinions, please view Understanding Best’s Credit Ratings.
A.M. Best is the world’s oldest and most authoritative insurance rating and information source.