OLDWICK, N.J.–(BUSINESS WIRE)–AM Best has removed from under review with developing implications and upgraded the Financial Strength Rating (FSR) to A- (Excellent) from B+ (Good) and the Long-Term Issuer Credit Rating (Long-Term ICR) to “a-” from “bbb-” of Boston Indemnity Company, Inc. Concurrently, AM Best has removed from under review with developing implications and downgraded the FSR to A- (Excellent) from A (Excellent) and the Long-Term ICR to “a-” from “a” of Great Midwest Insurance Company (GMIC), as GMIC is now part of the HIIG Group rating unit, increasing its Financial Size Category to IX. AM Best also has removed from under review with developing implications and affirmed the FSR of A- (Excellent) and the Long-Term ICRs of “a-” of Houston Specialty Insurance Company, Oklahoma Specialty Insurance Company and Imperium Insurance Company. The outlook assigned to these Credit Ratings (ratings) is negative. All companies are members of HIIG Group and are headquartered in Houston, TX.
The ratings reflect HIIG Group’s balance sheet strength, which AM Best categorizes as very strong, as well as its marginal operating performance, neutral business profile and appropriate enterprise risk management.
The negative outlooks reflect AM Best’s concern over the company’s balance sheet strength connected to historical adverse reserve volatility. Company management has taken a number of steps to stabilize the reserve volatility including numerous corrective actions over the past few years and the reorganization of the claims department. Going forward, AM Best will monitor the impact of these actions closely. Negative rating action may result from increases in prior year adverse loss reserve development, especially if the adverse development materially weakens risk-adjusted capitalization.
This press release relates to Credit Ratings that have been published on AM 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 AM 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 AM Best press releases, please view Guide for Media – Proper Use of Best’s Credit Ratings and AM Best Rating Action Press Releases.
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Jim Peavy
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