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FOR IMMEDIATE RELEASE
OLDWICK - MAY 19, 2015 02:44 PM (EDT)
A.M. Best has revised the outlook to negative from stable and affirmed the financial strength rating of A- (Excellent) and the issuer credit rating of "a-" of the members of California Casualty Group, which are The California Casualty Indemnity Exchange (San Mateo, CA), California Casualty General Insurance Company of Oregon (Portland, OR), California Casualty & Fire Insurance Company (San Mateo, CA) and California Casualty Insurance Company (Portland, OR). These companies operate under an inter-company pooling arrangement.
The revision of the outlook to negative reflects the companies' unfavorable underwriting performance, with underwriting and operating losses reported since 2012, and challenges the group faces to improve results in the near term given ongoing, albeit improving, competitive market conditions.
The affirmation of the ratings reflects the combined entities' solid level of capitalization and long history of operating profitability prior to 2012. In addition, the ratings further acknowledge the group's experienced management team and steps being taken to place the group on profitable footing. Furthermore, the ratings reflect the benefits derived from California Casualty Group's extensive affiliations with various affinity trade groups that have provided it with a stable and mature policyholder base and excellent business persistency. These positive rating factors are offset by the group's deteriorated underwriting performance and operating results in recent years.
Negative rating actions may occur if the group's underwriting and operating results do not improve as A.M. Best expects, based on management's projections, or should risk-adjusted capitalization materially weaken. Stabilization of the outlooks is contingent upon improved underwriting performance trends.
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:
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.