A.M. Best Withdraws Ratings of Galen Insurance Company

OLDWICK, N.J.--(BUSINESS WIRE)-- A.M. Best has affirmed the financial strength rating of B (Fair) and the issuer credit rating of “bb” of Galen Insurance Company (Galen) (St. Louis, MO). The outlook for both ratings is negative. Concurrently, A.M. Best has withdrawn the ratings in response to the company’s request to no longer participate in A.M. Best’s interactive rating process.

The ratings, which were downgraded on June 25, 2015, are reflective of Galen’s current and prospective weakness in capital adequacy as measured by Best's Capital Adequacy Ratio (BCAR), due mainly to a drop in surplus from unfavorable operating performance in 2014 and first-quarter 2015. The decreased earnings were primarily attributed to adverse claims development and increased ceded premium on swing rated reinsurance contracts. In addition, Galen has exhibited volatility in reported operating performance, and the company has an underwriting concentration in the inherently challenging medical professional liability insurance line of business. These factors are partially offset by a relatively short track record of favorable underwriting selectivity, claims management and reserve redundancies.

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 visit A.M. Best’s Ratings & Criteria Center.

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

Copyright © 2015 by A.M. Best Company, Inc. ALL RIGHTS RESERVED.

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A.M. Best Company

Dan Teclaw, 908-439-2200, ext. 5394

Senior Financial Analyst

[email protected]

or

Charles M. Huber, 908-439-2200, ext. 5122

Managing Senior Financial Analyst

[email protected]

or

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

Manager, Public Relations

[email protected]

or

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

Assistant Vice President, Public Relations

[email protected]

Source: A.M. Best Company