A.M. Best Downgrades Credit Ratings of California Casualty Group Members

Business Wire

OLDWICK, N.J.--(BUSINESS WIRE)-- A.M. Best has downgraded the Financial Strength Rating (FSR) to B++ (Good) from A- (Excellent) and the Long-Term Issuer Credit Rating (Long-Term ICR) to “bbb+” from “a-” of The California Casualty Indemnity Exchange (San Mateo, CA) and its wholly owned subsidiaries: California Casualty General Insurance Company of Oregon (Portland, OR), California Casualty & Fire Insurance Company (San Mateo, CA) and California Casualty Insurance Company (Portland, OR). All of these companies comprise California Casualty Group (California Casualty). The outlook for the FSR has been revised to stable from negative, while the outlook for the Long Term ICR remains negative.

The ratings reflect California Casualty’s balance sheet strength, which A.M. Best categorizes as very strong, as well as its marginal operating performance, neutral business profile and marginal enterprise risk management.

California Casualty’s ratings are supported by the group’s solid level of capitalization. The ratings also reflect the benefits derived from California Casualty's extensive affiliations with various affinity trade groups that have provided it with a stable and mature policyholder base and excellent business persistency. Offsetting these factors is pressure on the operating performance from several years of adverse trends in underwriting results. While the core underwriting performance has been improving in recent years, the actual results still trail industry averages. While capital is currently well supportive on a risk-adjusted basis, certain balance sheet measures also are deteriorating as a product of operating performance declines.

Negative rating actions could occur with further degrading of the operating results, additional contraction in policyholder’s surplus, or strategic initiatives failing to improve underwriting performance.

This press release relates to Credit Ratings that have been published on A.M. 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 A.M. Best’s Recent Rating Activity web page. For additional information regarding the use and limitations of Credit Rating opinions, please view Understanding Best’s Credit Ratings. For information on the proper media use of Best’s Credit Ratings and A.M. Best press releases, please view Guide for Media - Proper Use of Best’s Credit Ratings and A.M. Best Rating Action Press Releases.

A.M. Best is the world’s oldest and most authoritative insurance rating and information source. For more information, visit www.ambest.com.

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A.M. Best

Samiksha Gupta

Financial Analyst

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Robert Raber

Associate Director

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Christopher Sharkey

Manager, Public Relations

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Jim Peavy

Director, Public Relations

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