OLDWICK, N.J.–(BUSINESS WIRE)–A.M. Best Co. has revised the outlook to negative from stable and affirmed the financial strength rating of A- (Excellent) and issuer credit rating (ICR) of “a-” of SeaBright Insurance Company (SeaBright) (Chicago, IL). Concurrently, A.M. Best has revised the outlook to negative from stable and affirmed the ICR of “bbb-” of the publicly traded holding company of SeaBright, SeaBright Holdings, Inc. (SHI) (Wilmington, DE) (NYSE: SBX).
These rating actions reflect the significant downturn in SeaBright’s operating results in 2010 and 2011, which were driven by weakened underwriting performance associated with reserve strengthening actions for accident years 2007 through 2009, primarily related to increasing medical cost trends. Additionally, SeaBright continues to face marketplace challenges associated with its geographic and coverage lines expansion, which is likely to limit any turnaround in the company’s operating performance over the near term.
Despite the revised outlook, the affirmation of the ratings recognize SeaBright’s solid risk-adjusted capitalization, historically profitable operating results and the experienced management team within its niche workers’ compensation market.