A.M. Best Downgrades Ratings of Argus Fire & Casualty Insurance Company
2009-06-17 21:14:01 -
A.M. Best Co. has downgraded the financial strength rating to D (Poor) from C- (Weak) and issuer credit rating to “c” from “ccc-” of Argus Fire & Casualty Insurance Company (Argus) (North Miami Beach, FL). The outlook for both ratings is negative.
These rating actions reflect Argus’ elevated underwriting leverage, considerable exposure growth and significant catastrophe exposure as a personal property writer in Florida. In addition, the company relies substantially on the Florida Hurricane Catastrophe Fund (FHCF) for its catastrophe reinsurance program. Due to the contingent capital nature of the FHCF and its recently revised projected claims paying capacity, A.M.
Best remains concerned regarding FHCF’s ability to fund all obligations associated with a severe hurricane. Furthermore, Argus’ significant premium growth in recent years, accelerated by the company’s assumption of policies from Citizens Property Insurance Corporation has put additional stress on the company’s risk-adjusted capital position. As a result, these rating actions are reflective of Argus’ deteriorated risk-adjusted capital position.
These negative attributes are slightly offset by the company’s conservative investment profile and management’s knowledge of the Florida homeowners’ market. The ratings also acknowledge the potential financial flexibility of Argus’s ultimate parent, United Automobile Insurance Group.
For Best’s Credit Ratings, an overview of the rating process and rating methodologies, please visit www.ambest.com/ratings : cts.businesswire.com/ct/CT?id=smartlink&url=http%3A%2F%2Fwww .. .
The principal methodologies used in determining these ratings, including any additional methodologies and factors that may have been considered, can be found at www.ambest.com/ratings/methodology : cts.businesswire.com/ct/CT?id=smartlink&url=http%3A%2F%2Fwww .. .
Founded in 1899, A.M. Best Company is a global full-service credit rating organization dedicated to serving the financial and health care service industries, including insurance companies, banks, hospitals and health care system providers. For more information, visit www.ambest.com : cts.businesswire.com/ct/CT?id=smartlink&url=http%3A%2F%2Fwww .. .
A.M. Best Co.AnalystsMichael T. Venezia,
908-439-2200, ext. 5034 michael.venezia@ambest.com : mailto:michael.venezia@ambest.com orJeffrey
Mango, CPA, 908-439-2200, ext. 5204 jeffrey.mango@ambest.com : mailto:jeffrey.mango@ambest.com orPublic
RelationsJim Peavy, 908-439-2200, ext. 5644 james.peavy@ambest.com : mailto:james.peavy@ambest.com orRachelle
Morrow, 908-439-2200, ext. 5378 rachelle.morrow@ambest.com : mailto:rachelle.morrow@ambest.com
