Oldwick, NJ -(BusinessWire)- A.M. Best Co. has revised the outlook to negative from stable and affirmed the financial strength rating of B++ (Good) and issuer credit rating of “bbb” of Old Glory Insurance Company (Old Glory) (Tyler, TX).
The revised outlook reflects the declining trend in Old Glory’s underwriting performance over the past several years and the challenges it faces in the near term in its competitive markets. In recent years, the company’s operating results have been driven by less favorable underwriting results associated with premium growth in new markets, competitive pricing conditions and a high expense ratio.
The ratings for Old Glory reflect its strong risk-adjusted capitalization and expertise in the workers’ compensation marketplace. The ratings also acknowledge the support of its parent, Heartland Security Insurance Group, Inc. (Heartland Security), which has a conservative operating structure with no debt and has made regular capital contributions. A.M. Best expects that Heartland Security will continue to support Old Glory’s planned premium growth and operating shortfalls with capital contributions as needed, allowing Old Glory to maintain a level of risk-adjusted capitalization that continues to support its current rating level.
Key rating factors that could lead to future negative rating actions include Old Glory’s operating performance falling markedly short of A.M. Best‘s expectations or a significant decline in its risk-adjusted capitalization.