A.M. Best Revises Outlooks to Stable for Members of Atain Insurance Companies

OLDWICK, N.J.--(BUSINESS WIRE)-- A.M. Best has revised the outlooks to stable from positive and affirmed the Financial Strength Rating of A (Excellent) and the Long-Term Issuer Credit Ratings of “a+” of Atain Specialty Insurance Company and Atain Insurance Company, collectively referred to as Atain Insurance Companies (AIC). Both companies are headquartered in Farmington Hills, MI.

The Credit Ratings (ratings) reflect AIC’s balance sheet strength, which A.M. Best categorizes as strongest, as well as its strong operating performance, neutral business profile and appropriate enterprise risk management. The revised outlooks are the result of AIC’s subpar operating results in 2016 and 2017, which ended the group’s enviable streak of net underwriting profit and places the group’s overall profitability more in line with its peers. AIC’s risk-adjusted capitalization is at the strongest level and is furthered by the group’s ability to generate earnings and strong capital generation. Although neutral to the rating, AIC drives some distinct benefits from its affiliation with AJK Enterprises in terms of resources and services, as well as in AIC’s access to Burns & Wilcox, Ltd., one of the largest independently owned insurance wholesalers in the United States.

These positive rating factors are offset partially by the level of premium growth recorded in recent years, the subpar operating performance of late and the modest, albeit adverse reserve development reported in accident years 2014, 2015 and 2016. The ratings and the revised outlooks are based on A.M. Best’s expectation that over the long run, AIC will be able to sustain its historical level of performance, based on a sound business plan that includes the benefits of being affiliated with AJK Enterprises and associated companies.

Atain Specialty Insurance Company and its wholly owned subsidiary, Atain Insurance Company, participate in an intercompany reinsurance pooling agreement. The stable outlooks contemplate strong operating profitability, preservation of the strongest level of capital and the ability to navigate market cycles through AIC’s long-standing agency partnerships.

As part of AJK Enterprises, AIC also has the ability to participate and increase its retention on matured programs produced by its affiliated wholesaler. This business composition has proven to be profitable and has helped drive long-term operating profitability. AIC benefits from synergies and substantial expense efficiencies, which result in lower costs and enhanced underwriting profitability.

Positive rating action may result from a return to better-than-average operating results and advancement of risk-adjusted capital through retained earnings. Negative ratings pressure could include a material decline in risk-adjusted capital or further weakening in operating performance, which falls short of its peers and expectations. Additional negative rating pressure could result from a sudden, unforeseen shift in AIC’s present business strategy or distribution model.

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.

Copyright © 2017 by A.M. Best Rating Services, Inc. and/or its affiliates. ALL RIGHTS RESERVED.

View source version on businesswire.com: http://www.businesswire.com/news/home/20171221005717/en/

A.M. Best

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

Senior Financial Analyst

[email protected]

or

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

Senior Director

[email protected]

or

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

Manager, Public Relations

[email protected]

or

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

Director, Public Relations

[email protected]

Source: A.M. Best