A.M. Best Revises Outlook to Negative for Members of the NORCAL Group
The ratings reflect the group’s strong balance sheet, historically positive operating performance and sound business profile as one of the leading providers of medical professional liability (MPL) insurance in
The outlook reflects the group’s trend of deteriorating operating performance including four-plus years of underwriting losses through the first nine months of 2015. Over this period, the pure loss ratio has increased significantly, and the loss adjustment expense ratio remains elevated. The 2014 and 2013 losses were driven by challenging market dynamics and company fundamentals before policyholder dividends were paid, while the 2012 and 2011 losses resulted from payment of the policyholder dividends, which were discretionary.
NORCAL was the ninth largest writer of MPL insurance in
Separately, NORCAL entered a definitive agreement on
Negative rating actions could occur if the balance sheet was to significantly weaken as measured by Best’s Capital Adequacy Ratio (BCAR) model or should operating performance and underwriting results continue to trend unfavorably.
This press release relates to rating(s) that have been published on
Copyright © 2015 by A.M. Best Company, Inc. ALL RIGHTS RESERVED.
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