AM Best Revises Issuer Credit Rating Outlook to Negative for Safety Insurance Group, Inc. and Its Key Subsidiaries
2024年6月19日 - 4:05AM
ビジネスワイヤ(英語)
AM Best has revised the outlook to negative from stable
for the Long-Term Issuer Credit Ratings (Long-Term ICR) and
affirmed the Financial Strength Rating (FSR) of A (Excellent) and
the Long-Term ICRs of “a+” (Excellent) of Safety Insurance Company,
Safety Indemnity Insurance Company, Safety Property and Casualty
Insurance Company and Safety Northeast Insurance Company.
Collectively, these companies are referred to as Safety Group
(Safety). The outlook of the FSR is stable. At the same time, AM
Best has revised the outlook to negative from stable and affirmed
the Long-Term ICR of “bbb+” (Good) of Safety Insurance Group, Inc.
(Delaware) [NASDAQ/GS: SAFT], the publicly traded parent of Safety.
All companies are domiciled in Boston, MA, except where
specified.
The Credit Ratings (ratings) reflect Safety’s balance sheet
strength, which AM Best assesses as very strong, as well as its
strong operating performance, neutral business profile and
appropriate enterprise risk management.
The revision of the Long-Term ICR outlook to negative from
stable reflects a material decline in Safety’s risk-adjusted
capitalization trends, as measured by Best’s Capital Adequacy Ratio
(BCAR), over the past two years. The erosion in policyholder
surplus has been driven by an operating loss in 2023 following a
decline in 2022 resulting from unrealized losses and dividend
activity, including the holding company purchase of Safety
Northeast Insurance Agency, Inc. Risk-adjusted capital also has
been weakened by dividend payments, which have tempered surplus
growth historically. The operating loss in 2023 was driven by
severe weather in the first and fourth quarters compounded by
inflationary pressures. Management continues to review rates and
implement increases as needed to offset higher loss costs as well
as continued refinement of risk selection near coastal areas to
improve Safety’s weather resilience.
Going forward, Safety is expected to maintain capital levels
sufficient to support its current ratings. However, negative rating
action could occur if capitalization trends continue to weaken, and
surplus levels are not supportive of the current balance sheet
strength assessment.
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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Janet Hernandez Senior Financial Analyst +1 908 882
1890 janet.hernandez@ambest.com
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Relations +1 908 882 2310
christopher.sharkey@ambest.com
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908 882 2318 al.slavin@ambest.com