A.M. Best Downgrades Ratings of United Automobile Insurance Group

A.M. Best Co. has downgraded the financial strength rating to C (Weak) from B- (Fair) and issuer credit ratings to “ccc” from “bb-” for United Automobile Insurance Group (United Auto) and its lead member, United Automobile Insurance Company (both of Miami Gardens, FL). The outlook for all ratings has been revised to negative from stable.

These rating actions reflect the substantial decline in United Auto’s risk-adjusted capitalization following significant reserve strengthening actions in 2008 that were related to 2006 and prior accident years, primarily in its personal injury protection (PIP) line of business. In addition, United Auto maintains elevated underwriting and investment leverage, both of which also contributed to the deterioration in its risk-adjusted capital. The negative outlook reflects A.M. Best’s concern that capitalization may deteriorate further if United Auto’s operating performance does not improve in the near term.

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

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