A.M. Best Downgrades Credit Ratings of Canal Insurance Company and Canal Indemnity Company

OLDWICK, N.J.--(BUSINESS WIRE)-- A.M. Best has downgraded the Financial Strength Rating to B++ (Good) from A- (Excellent) and the Long-Term Issuer Credit Ratings to “bbb+” from “a-” of Canal Insurance Company and Canal Indemnity Company, collectively referred to as Canal Group (Canal). Both companies are domiciled in Greenville, SC. The outlook of these Credit Ratings (ratings) has been revised to stable from negative.

The rating downgrades are the result of Canal’s significant presence in the commercial transportation sector and the external challenges facing this sector in recent years, which have led to sub-par underwriting and operating results in recent years. These rating actions also consider the significant adverse loss reserve development reported by Canal in recent years and the challenges of returning underwriting results back to historical, profitable levels despite management’s ongoing corrective actions. Conversely, Canal’s ratings reflect its strong risk-adjusted capitalization and the group’s recognized leadership position in the commercial trucking segment.

Positive rating action could result if prior-year reserves stabilize, and recent improvement in underwriting and operating performance meets anticipated levels, further demonstrating the benefits of corrective actions taken in recent years. Negative rating action could result if further reserve development occurs, and underwriting and operating performance fall short of anticipated levels.

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.

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A.M. Best

Edward J. Zonenberg, +1-908-439-2200, ext. 5135

Senior Financial Analyst

edward.zonenberg@ambest.com

or

Daniel J. Ryan, +1-908-439-2200, ext. 5325

Senior Director

daniel.ryan@ambest.com

or

Christopher Sharkey, +1-908-439-2200, ext. 5159

Manager, Public Relations

christopher.sharkey@ambest.com

or

Jim Peavy, +1-908-439-2200, ext. 5644

Director, Public Relations

james.peavy@ambest.com

Source: A.M. Best