A.M. Best has removed from under review with negative
implications and downgraded the Financial Strength Rating to A-
(Excellent) from A (Excellent) and the Long-Term Issuer Credit
Rating (Long-Term ICR) to “a-” from “a” for the members of the
AmTrust Group (AmTrust). In addition, A.M. Best has removed
from under review with negative implications and downgraded the
Long-Term ICR of AmTrust Financial Services, Inc. (AFSI)
[NASDAQ: AFSI] to “bbb-” from “bbb” and downgraded all of AFSI’s
Long-Term Issue Credit Ratings (Long-Term IRs) and Indicative
Long-Term IRs by one notch. Also, A.M. Best has removed from under
review with negative implications and affirmed the FSR of A-
(Excellent) and Long-Term ICR of “a-” of AmTrust Title Insurance
Company (New York, NY). The outlook assigned to all of these
Credit Ratings (ratings) is stable. See below for a listing of all
companies and ratings.
The rating actions reflect AmTrust’s balance sheet strength,
which A.M. Best categorizes as very strong, as well as its adequate
operating performance, neutral business profile and marginal
enterprise risk management (ERM.)
Risk-adjusted capitalization, as measured by Best’s Capital
Adequacy Ratio (BCAR), improved through the first quarter of 2018,
primarily related to a reduction in investment risk following the
sale of certain private and related party investments that carried
substantial risk charges. The balance sheet assessment also
reflects AmTrust’s relatively modest exposure to natural
catastrophe and terrorism events, which is reflected in favorable
performance on stress tests of its risk-adjusted capitalization.
The group maintains a panel of quality reinsurers, and has
substantial security from its largest reinsurer in the form of a
trust account.
In addition, A.M. Best views AFSI as having a neutral impact on
the balance sheet assessment, based on improvements in its
risk-adjusted capitalization following the sale of a majority
interest in certain U.S.-based fee businesses. This transaction
replaced goodwill and intangibles with cash on AFSI’s balance
sheet, improving quality of capital and risk-adjusted
capitalization, as available capital under the BCAR model excludes
goodwill and intangibles. The recently approved plan under which
AFSI will be privatized has a neutral impact on the rating. The
company has stated publicly that it will maintain its public filer
status with the U.S. Securities and Exchange Commission, enabling
access to public financing should such a step be appropriate in the
future. At the same time, the ability of management to assess its
long-term business plans removed from the shorter-term focus of
public equity markets should allow for improved development and
implementation of those plans.
Offsetting these favorable rating factors is adverse development
of prior years’ loss reserves that occurred in 2016 and 2017. The
impact of the 2017 action on surplus was muted by the adverse
development cover (ADC) purchased and exhausted by AmTrust during
the year. However, any future adverse development of reserves as of
March 31, 2017 that is not subject to other reinsurance agreements
will be borne by the group. Through year-end 2017, adverse reserve
development was particularly noticeable in the 2010 through 2014
accident years. Although there has been no material adverse
development reported since the third quarter of 2017, A.M. Best
continues to incorporate a reserve deficiency in its view of
AmTrust’s risk-adjusted capitalization. This assumed deficiency
will be adjusted over time based on future development
patterns.
AmTrust’s adequate operating performance assessment reflects the
decline in calendar and accident year performance in 2016 and 2017,
which was impacted by the adverse development of prior years’ loss
reserves in the calendar years and by higher selected loss ratios
for those accident years. The deterioration in underwriting results
and increased variability of performance in recent years
contributed to the downgrade of the ratings. The assessment of
operating performance also reflects the trends and variability in
performance of the most recent years relative to prior years, and
conditions in the group’s core markets.
The neutral assessment of AmTrust’s business profile reflects
its position within the U.S. workers’ compensation market and the
diversification of its business within the U.S. and
internationally. Offsetting these positive factors are market
conditions in its largest line of business, workers’ compensation,
and the execution risk associated with transforming the operation
from its previous growth-oriented strategy to a more focused
property/casualty enterprise while re-establishing underwriting and
operating performance in line with historical levels.
ERM is assessed currently as marginal for the AFSI enterprise.
At present, portions of the ERM framework, while emerging and
developed, have yet to be fully embedded within the organization,
which is the state A.M. Best would expect from an enterprise of
AFSI’s size and complexity. The issues the enterprise has
experienced over the near-term indicate that risk management
resources and capabilities with respect to reserving and
operational risk have yet to demonstrate long-term effectiveness.
The material weaknesses identified in the 2016 audit highlighted
the challenges of making acquisitions at the scope and pace of the
organization prior to 2017.
While A.M. Best acknowledges the actions company management has
taken to resolve these issues, the material weaknesses have yet to
be fully remedied. Management has made progress toward
accomplishing plans as expected, including making accurate and
timely filings, but continued to face challenges through the first
half of 2018. Given the volume of change that has characterized the
enterprise over time – including merger and acquisition activity
with the associated integration; capital raising to fund that
activity; negotiating the sale of the fee-business; and the
upcoming change in ownership – the opportunity for management to
focus on its core business provides significant opportunity for
more firmly embedding its risk management framework and developing
strong and consistent capabilities to meet the on-going risks of
the business.
The ratings of AFSI reflect its adequate level of risk-adjusted
capitalization, as measured by BCAR, and financial leverage and
coverage metrics that are within guidelines for the current rating
level. Going forward, earnings power at the holding company will be
impacted by the decision to sell a portion of its fee business, but
this will be offset at least partially by investment income on the
proceeds that were achieved from the sale. As noted previously, the
sale of that business removed a material level of goodwill and
intangibles from the balance sheet, strengthening both overall
balance sheet quality and risk-adjusted capitalization.
The ratings of AmTrust Title Insurance Company reflect its
balance sheet strength, which is assessed as very strong, its
marginal operating performance, limited business profile and
marginal ERM. Risk-adjusted capitalization is at the strongest
level as measured by BCAR, but the relatively modest size of the
balance sheet and potential for volatility in light of the growth
experienced by the company produce a final balance sheet strength
assessment of very strong. Operating performance improved in 2017
and is close to the performance of its title market peers. However,
lack of scale negatively impacted results since operations
commenced due to elevated expenses relative to peers, even as
losses remained better than average. The company has a limited
business profile, with a market share well below 1% nationally. The
business is concentrated substantially in New York, but even within
that state, the company has not achieved significant market share.
In addition, the title insurance market has faced heightened
regulatory scrutiny in New York. The issues associated with ERM
described previously for the AFSI enterprise drove the assessment
of ERM as marginal.
The FSR has been downgraded to A- (Excellent) from A (Excellent)
and the Long-Term ICRs downgraded to “a-” from “a” with both
ratings removed from under review with negative implications and a
stable outlook assigned for the following members of the AmTrust
Group:
- AmTrust Captive Solutions
Limited
- AmTrust Europe Limited
- AmTrust Insurance Company of
Kansas
- AmTrust Insurance Luxembourg
S.A.
- AmTrust International Insurance
Ltd
- AmTrust International Underwriters
Designated Activity Company
- ARI Insurance Company
- Associated Industries Insurance
Company, Inc.
- CorePointe Insurance
Company
- Developers Surety and Indemnity
Company
- First Nonprofit Insurance
Company
- Heritage Indemnity Company
- Indemnity Company of
California
- Milford Casualty Insurance
Company
- Nationale Borg Reinsurance
N.V.
- Republic Fire and Casualty Insurance
Company
- Republic Lloyds
- Republic Underwriters Insurance
Company
- Republic-Vanguard Insurance
Company
- Rochdale Insurance Company
- Security National Insurance
Company
- Sequoia Indemnity Company
- Sequoia Insurance Company
- Southern County Mutual Insurance
Company
- Southern Insurance Company
- Southern Underwriters Insurance
Company
- Technology Insurance Company,
Inc.
- Wesco Insurance Company
The following Long-Term IRs have been removed from under review
with negative implications and downgraded with a stable outlook
assigned:
-- to “bbb-” from “bbb” on $69 million 5.5%
senior unsecured notes, due 2021
-- to “bbb-” from “bbb” on $250 million
6.125% senior unsecured notes, due 2023
-- to “bbb-” from “bbb” on $158 million 2.75%
senior unsecured notes, due 2044
-- to “bbb-” from “bbb” on $76 million 2.75%
senior unsecured notes, due 2044
The following Long-Term IRs have been removed from under review
with negative implications and downgraded with a stable outlook
assigned:
-- to "bb+” from "bbb-" on $150 million 7.25%
subordinated notes, due 2055
-- to "bb+” from "bbb-" on $125 million 7.5%
subordinated notes, due 2055
The following Long-Term IRs have been removed from under review
with negative implications and downgraded with a stable outlook
assigned:
-- to “bb” from “bb+” on $120 million 6.75%
preferred stock
-- to “bb” from “bb+” on $250 million 6.95%
non-cumulative preferred stock
-- to “bb” from “bb+” on $100 million 7.25%
preferred stock
-- to “bb” from “bb+” on $182.5 million 7.5%
preferred stock
-- to “bb” from “bb+” on $80 million 7.625%
preferred stock
-- to “bb” from “bb+” on $125 million 7.75%
preferred stock
The following indicative IRs have been removed from under review
with negative implications and downgraded with a stable outlook
assigned:
-- to “bbb-” from “bbb” on senior unsecured
debt
-- to “bb+” from “bbb-” on subordinated
debt
-- to “bb” from “bb+” on preferred stock
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. For information on the proper media use of Best’s
Credit Ratings and A.M. Best press releases, please view
Guide for Media - Proper Use of Best’s Credit Ratings and A.M.
Best Rating Action Press Releases.
A.M. Best is the world’s oldest and most authoritative
insurance rating and information source. For more information,
visit www.ambest.com.
Copyright © 2018 by A.M. Best Rating
Services, Inc. and/or its affiliates. ALL RIGHTS RESERVED.
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version on businesswire.com: https://www.businesswire.com/news/home/20180703005580/en/
A.M. BestJennifer Marshall, CPCU, ARM, +1
908-439-2200, ext.
5327Directorjennifer.marshall@ambest.comorChristopher
Sharkey, +1 908-439-2200, ext. 5159Manager, Public
Relationschristopher.sharkey@ambest.comorMichael
Lagomarsino, CFA, FRM, +1 908-439-2200, ext. 5810Senior
Directormichael.lagomarsino@ambest.comorJim Peavy, +1
908-439-2200, ext. 5644Director, Public
Relationsjames.peavy@ambest.com
Amtrust Financial Services, Inc. (delisted) (NASDAQ:AFSI)
과거 데이터 주식 차트
부터 8월(8) 2024 으로 9월(9) 2024
Amtrust Financial Services, Inc. (delisted) (NASDAQ:AFSI)
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부터 9월(9) 2023 으로 9월(9) 2024