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OLDWICK, N.J.–(BUSINESS WIRE)–AM Best has downgraded the Financial Strength Rating (FSR) to B++ (Good) from A- (Excellent) and the Long-Term Issuer Credit Rating (Long-Term ICR) to “bbb+” from “a-” of Tower Hill Prime Insurance Company (Tower Hill Prime) (Gainesville, FL). The outlook of the FSR has been revised to stable from negative, while the outlook of the Long-Term ICR is negative.

These Credit Ratings (ratings) reflect Tower Hill Prime’s balance sheet strength, which AM Best categorizes as very strong, as well as its marginal operating performance, limited business profile and appropriate enterprise risk management (ERM).

The rating downgrades reflect significant volatility in underwriting performance that has resulted in operating performance that no longer supports the adequate assessment. Tower Hill Prime’s underwriting performance has been unfavorably impacted by elevated weather activity and an adverse legal claims environment, as well as adverse loss reserve development due to challenging claims trends. While Tower Hill Prime has implemented a number of corrective actions to improve performance such as rate increases, more aggressive agency management, refinement of underwriting schemes and more selective risk criteria, its underwriting performance has not yet stabilized.

The negative outlook on the Long-Term ICR reflects an unfavorable trend in risk-adjusted capitalization, as measured by Best’s Capital Adequacy Ratio (BCAR), as well as elevated reinsurance dependency and continued adverse loss reserve development. As the overall balance sheet strength is currently assessed at the high end of very strong, continued pressure from the aforementioned factors pressures this position. Elevated reinsurance dependency will continue to challenge the company in the wake of a hardening reinsurance market; however, management intends to reduce exposure and thus reduce the level of necessary reinsurance. Prior efforts to stabilize loss reverse development have resulted in modest year over year improvement but deficiencies remain.

The business profile assessment of limited reflects Tower Hill Prime’s concentration in Florida, which is a hurricane-prone state. Catastrophe risk management remains a focal point of the company’s ERM program, which is considered appropriate. The ERM program includes comprehensive catastrophe reinsurance coverage, formal documentation of risks, and specific risk appetites and tolerances statements.

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 Guide to 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.

AM Best is a global credit rating agency, news publisher and data analytics provider specializing in the insurance industry. Headquartered in the United States, the company does business in over 100 countries with regional offices in New York, London, Amsterdam, Dubai, Hong Kong, Singapore and Mexico City. For more information, visit

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Christopher Draghi
Senior Financial Analyst
+1 908 439 2200, ext. 5043
[email protected]

Michelle Baurkot
+1 908 439 2200, ext. 5314
[email protected]

Christopher Sharkey
Manager, Public Relations
+1 908 439 2200, ext. 5159
[email protected]

Jim Peavy
Director, Communications
+1 908 439 2200, ext. 5644
[email protected]

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