A.M. Best Revises Outlooks to Negative for STICO Mutual Insurance Company, Risk Retention Group
These Credit Rating (ratings) reflect STICO’s balance sheet strength, which
The revised outlooks reflect the negative trend in operating performance due to competitive market conditions, weaker economies of scale and volatility in the energy sector over the last couple of years. Earnings prospects could face further headwinds as recent results continue to be challenged by declining net written premium due to policyholder consolidation and business closures, in addition to potential volatility in steel prices and loss costs related to steel tank replacement costs. The recent federal proposal for steel tariffs has increased prices and volatility, creating uncertainty in the energy market. To counter these inherent challenges, management has taken steps to diversify STICO’s revenue stream with related ancillary product offerings, but the company continues to face pressure from large multi-line insurers in its niche market segment.
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
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