A.M. Best Downgrades Ratings of Armed Forces Insurance Exchange
Business Wire, Inc. |
The ratings of AFIE recognize its adequate, albeit reduced, capitalization and long-standing history as a provider of personal lines insurance products to the preferred risk segment of the military market. Partly offsetting these positive rating factors are the company’s unfavorable underwriting performance over the past five years, geographic exposure concentration in coastal areas and elevated underwriting expense ratio.
The revised outlook for the FSR reflects A.M. Best’s expectations that management will continue to successfully execute its various profitability initiatives designed to improve the company’s ongoing results.
Negative rating actions could occur if there were an unexpected and material decline in AFIE’s risk-adjusted capitalization, continued deterioration in its operating performance or a diminishing of its liquidity measures over the next several years.
The methodology used in determining these ratings is Best’s Credit Rating Methodology, which provides a comprehensive explanation of A.M. Best’s rating process and contains the different rating criteria employed in the rating process. Key criteria utilized include: “Catastrophe Analysis in A.M. Best Ratings” and “Risk Management and the Rating Process for Insurance Companies.” Best’s Credit Rating Methodology can be found at www.ambest.com/ratings/methodology.
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Copyright: | Copyright Business Wire 2012 |
Wordcount: | 313 |
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