2008-05-08 23:47:10 -
- AequiCap Inc., Fort Lauderdale Mark Stephenson, 954-493-6565 ext 814 mark_stephenson@aequicap.com AequiCap Insurance Company was notified by A.M. Best Company of a one notch downward adjustment of its rating to C++. This one notch adjustment remains within the C++/B- range anticipated by the company as a result of adverse development in the trucking line from the 2002-2005 accident
years predominantly relating to reinsurance commutations affecting those years. With those accident years now 97% closed (approximately 400 claims remaining out of over 14,000) and profitable results emerging from the subsequent years for all lines, the company anticipates strong profitable growth on a go forward basis.
This favorable outlook is based not only on the strong profitability of all lines during the last two underwriting years but also upon a program of capital contribution by the company's shareholders that has exceeded $16 million to date with further contributions envisioned.
While the company cannot address the timing of any A. M. Best's future upgrade, the company's Best Capital Adequacy Ratio (BCAR) score substantially improved from 2006 to 2007. Based upon continuing strong profitability across all lines, favorable loss development, continued capital contributions and reduced leverage, the company expects the BCAR score to rise for the second consecutive year in 2008 and to return to a B- or better range score in the future. Continued improvement in the BCAR score will ultimately be reflected in the company's rating.
At the same time, AequiCap has expanded its underwriting partnerships with CastlePoint Insurance Company and its affiliate, Tower Group (both A-); Lincoln General Insurance Company and American Country Insurance Company; members of the Kingsway America Group (B++); Star Insurance Company and Ameritrust Insurance Corporation, members of the Meadowbrook Insurance Group (A-); Rockwood Casualty Insurance Company and Colony Insurance Company, members of the Argonaut Group (A); and several other carriers covering trucking, workers' compensation, and livery lines to provide its agents and customers a wide range of ongoing products to meet their needs.
Rating Change Was Expected -- Performance/Profits Ahead of Plan
