AM Best Revises Issuer Credit Rating Outlooks to Negative for Members of CSAA Insurance Group
25 Julio 2024 - 1:41PM
Business Wire
AM Best has revised the outlooks to negative from stable
for the Long-Term Issuer Credit Ratings (Long-Term ICRs) and
affirmed the Financial Strength Rating (FSR) of A (Excellent) and
the Long-Term ICRs of “a+” (Excellent) of CSAA Insurance Exchange
(Walnut Creek, CA) and its pooled subsidiaries and reinsured
affiliates. The outlook of the FSR is stable. All companies are
collectively referred to as CSAA. (See below for a detailed listing
of companies.)
The Credit Ratings (ratings) reflect CSAA’s balance sheet
strength, which AM Best assesses as strongest, as well as its
marginal operating performance, favorable business profile and
appropriate enterprise risk management.
The revision of Long-Term ICRs outlooks to negative from stable
for CSAA is driven by the group’s reduction in capital level, which
resulted in lower risk-adjusted capitalization as measured by
Best’s Capital Adequacy Ratio (BCAR) (albeit still at the strongest
level) and underwriting leverage deterioration. The capital drop
was driven by much higher than anticipated claims cost and material
reserve strengthening. There is a concern that any additional
stress can put pressure on the current balance sheet assessment.
CSAA is working on several capital-bolstering initiatives, which if
implemented, can restore risk-adjusted capitalization measures
closer to historical levels.
Operating results fluctuated over the last several years and
deteriorated in 2023, with the combined ratio reaching 114%
compared with 99.7% in 2022. The non-catastrophic loss ratio saw
significant increase due to inflationary cost pressures for auto
claims. CSAA expects its combined ratio to improve through 2024,
due to sizeable rate increases combined with new initiatives
focused on underwriting profitability. Business retention continues
to be strong and there is a material new premium growth in
commercial auto segment.
The FSR of A (Excellent) and the Long-Term ICRs of “a+”
(Excellent) have been affirmed, with the Long-Term ICRs outlooks
revised to negative from stable and the FSR outlook maintained at
stable, for the following members of CSAA:
- CSAA Insurance Exchange
- CSAA Affinity Insurance Company
- CSAA General Insurance Company
- CSAA Fire & Casualty Insurance Company
- Fortential Insurance Company
- Mobilitas General Insurance Company
- Mobilitas Insurance Company
- Mobilitas Insurance Company of Arizona
This press release relates to Credit Ratings that have been
published on AM 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 AM Best’s Recent
Rating Activity web page. For additional information
regarding the use and limitations of Credit Rating opinions, please
view Guide to Best's Credit Ratings. For information
on the proper use of Best’s Credit Ratings, Best’s Performance
Assessments, Best’s Preliminary Credit Assessments and AM Best
press releases, please view Guide to Proper Use of Best’s
Ratings & Assessments.
AM Best is a global credit rating agency, news publisher and
data analytics provider specializing in the insurance industry.
Headquartered in the United States, the company does business in
over 100 countries with regional offices in London, Amsterdam,
Dubai, Hong Kong, Singapore and Mexico City. For more information,
visit www.ambest.com.
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Michael Venezia Senior Financial Analyst +1 908
882 2414 michael.venezia@ambest.com
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908 882 2318 al.slavin@ambest.com