AP NEWS

AM Best Downgrades Credit Ratings of Amalgamated Casualty Insurance Company

December 19, 2018

OLDWICK, N.J.--(BUSINESS WIRE)--Dec 19, 2018--AM Best has downgraded the Financial Strength Rating to B++ (Good) from A- (Excellent) and the Long-Term Issuer Credit Rating to “bbb+” from “a-” of Amalgamated Casualty Insurance Company (ACIC) (headquartered in Chevy Chase, MD). The outlook of these Credit Ratings (ratings) has been revised to negative from stable.

The ratings reflect ACIC’s balance sheet strength, which AM Best categorizes as very strong, as well as its adequate operating performance, limited business profile and marginal enterprise risk management (ERM).

The downgrades reflect a revision in AM Best’s assessment of the company’s ERM to marginal from appropriate. The company does not have a formal ERM program. The ERM assessment was revised due to a significant downturn in the company’s operating performance associated with its expansion initiatives into non-core commercial auto lines and into new territories. In addition, operational shortcomings were noted in ACIC’s underwriting, claims and reserving practices, all of which are being addressed by management. In recent years, Amalgamated has grown aggressively in non-core classes of business and in U.S. states with mandatory higher limits. The overall growth initiative has not been profitable and it continues to perform below the company’s and AM Best’s expectations. ACIC has taken steps to improve performance through non-renewals, rate increases and putting unprofitable classes into run-off. In addition, the company has strengthened its management team, as well as its underwriting, claims and reserving practices. However, management continues to look for avenues of profitable growth outside of its areas of expertise.

The negative outlooks reflect AM Best’s concern that operating performance is under pressure, which may result in further negative rating action if significant improvement is not forthcoming in the near term. The limited business profile is due to ACIC’s concentration of risk in commercial automobile lines, primarily for taxis and sedans in the Washington, D.C. metropolitan area.

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 web page. For additional information regarding the use and limitations of Credit Rating opinions, please view . For information on the proper media use of Best’s Credit Ratings and AM Best press releases, please view .

AM Best is a global rating agency and information provider with a unique focus on the insurance industry. Visit for more information.

Copyright © 2018 by A.M. Best Rating Services, Inc. and/or its affiliates. ALL RIGHTS RESERVED.

View source version on businesswire.com:https://www.businesswire.com/news/home/20181219005424/en/

CONTACT: Connor Brach, FRM

Financial Analyst

+1 908 439 2200, ext.5573

connor.brach@ambest.comCharles M. Huber

Director

+1 908 439 2200, ext. 5122

charles.huber@ambest.comChristopher Sharkey

Manager, Public Relations

+1 908 439 2200, ext. 5159

christopher.sharkey@ambest.comJim Peavy

Director, Public Relations

+1 908 439 2200, ext. 5644

james.peavy@ambest.com

KEYWORD: UNITED STATES EUROPE NORTH AMERICA MARYLAND NEW JERSEY

INDUSTRY KEYWORD: PROFESSIONAL SERVICES INSURANCE

SOURCE: AM Best

Copyright Business Wire 2018.

PUB: 12/19/2018 09:14 AM/DISC: 12/19/2018 09:14 AM

http://www.businesswire.com/news/home/20181219005424/en

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