Oldwick, NJ -(BusinessWire)- AM Best has downgraded the Long-Term Issuer Credit Rating (Long-Term ICR) to “bbb” (Good) from “bbb+” (Good) and affirmed the Financial Strength Rating (FSR) of B++ (Good) of Alaska Timber Insurance, Inc. (ATI) (Ketchikan, AK). The outlook of the FSR has been revised to negative from stable, while the outlook for the Long-Term ICR is negative.
The Credit Ratings (ratings) reflect ATI’s balance sheet strength, which AM Best assesses as very strong, as well as its marginal operating performance, very limited business profile and appropriate enterprise risk management.
The downgrading of the Long-Term ICR reflects a decline in AM Best’s assessment of ATI’s business profile, which is the result of management’s recent decision to discontinue writing new workers’ compensation policies and to run off its existing policies. As of Jan. 1, 2023, the company non-renewed its current book of business and will no longer have any policies in force; consequently, warranting a downgrade in its business profile since the company is exiting its sole line of business in the Alaskan workers’ compensation market.
The negative outlooks reflect the pressure on ATI’s overall balance sheet strength and the potential for balance sheet strength assessment components to deteriorate materially due to the company’s weakening operating performance from an adverse development of claims, while the company operates in runoff. Negative rating action could occur if there is a material deterioration in risk-adjusted capitalization or in any additional balance sheet strength components.
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 (PDF). For information on the proper media use of Best’s Credit Ratings and AM Best press releases, please view Guide for Media – Proper Use of Best’s Credit Ratings and AM Best Rating Action Press Releases (PDF).
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.
Copyright © 2023 by A.M. Best Rating Services, Inc. and/or its affiliates. ALL RIGHTS RESERVED.