A.M. Best Downgrades Ratings of Knight Insurance Company Ltd. and Its Affiliates; Places Under Review with Negative Implications

OLDWICK, N.J.--(BUSINESS WIRE)-- A.M. Best has downgraded the financial strength rating (FSR) to B++ (Good) from A- (Excellent) and the issuer credit ratings (ICR) to “bbb+” from “a-” of Knight Insurance Company Ltd. (Knight Insurance) (Cayman Islands) and its reinsured U.S. insurance company subsidiary, Knight Specialty Insurance Company (Wilmington, DE). Additionally, A.M. Best has placed all ratings under review with negative implications.

Concurrently, A.M. Best has downgraded the ICR to “bbb” from “bbb+” and affirmed the FSR of B++ (Good) of its affiliate, Knightbrook Insurance Company (Wilmington, DE). Both ratings have been placed under review with negative implications.

The rating actions follow the delay by Knight Insurance in submitting 2015 statutory filings to Cayman and U.S. regulatory agencies.

The ratings reflect Knight Insurance’s excellent capitalization and the companies’ ability to access additional capital if needed. The ratings also consider Knight Insurance’s strategic role as a member of the Hankey Group, a group of companies that operates in the retail automotive industry. Partially offsetting these positive rating factors are continued concerns with heightened execution risk due to significant business growth in recent years, coupled with underwriting losses and related uncertainty regarding loss-reserve and premium adequacy from this new business. These concerns are amplified by adverse loss development, and the potential for a continuation of that trend to adversely impact future operating results and risk-adjusted capitalization. In addition, the companies have moderate common stock leverage relative to the composite.

The under review status reflects A.M. Best’s concern with the ability of these companies to execute their business plans in light of the late filing of the financial statements. The ratings will remain under review pending submission of the filings and A.M. Best’s assessment of this material.

This press release relates to rating(s) 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.

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A.M. Best

Susan Molineux, +1 908 439 2200, ext. 5829

Senior Financial Analyst

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Steven Chirico, +1 908 439 2200, ext. 5087

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

Assistant Vice President, Public Relations

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Source: A.M. Best