A.M. Best Downgrades Ratings of First Chicago Insurance Company

OLDWICK, N.J.--(BUSINESS WIRE)-- A.M. Best Co. has downgraded the financial strength rating to C+ (Marginal) from B- (Fair) and issuer credit rating to “b-” from “bb-” of First Chicago Insurance Company (First Chicago) (Bedford Park, IL). The outlook for both ratings is negative.

The rating downgrades reflect First Chicago’s elevated leverage as a result of its premium growth, which has far outpaced surplus growth. In addition, underwriting losses have virtually negated almost $6.5 million in capital contributions from its parent, J and P Holdings, Inc. Furthermore, First Chicago operates with an elevated expense position and has poor reserve development trends.

Partially offsetting these negative rating factors are First Chicago’s favorable loss experience and increasing investment income.

For Best’s Credit Ratings, an overview of the rating process and rating methodologies, please visit www.ambest.com/ratings.

The principal methodologies used in determining these ratings, including any additional methodologies and factors that may have been considered, can be found at www.ambest.com/ratings/methodology.

Founded in 1899, A.M. Best Company is a global full-service credit rating organization dedicated to serving the financial and health care service industries, including insurance companies, banks, hospitals and health care system providers. For more information, visit www.ambest.com.

A.M. Best Company
Analysts
Frederick DeLeon, 908-439-2200, ext. 5175
[email protected]
or
Gary Davis, 908-439-2200, ext. 5665
[email protected]
or
Public Relations
Rachelle Morrow, 908-439-2200, ext. 5378
[email protected]
or
Jim Peavy, 908-439-2200, ext. 5644
[email protected]

Source: A.M. Best Company