A.M. Best downgraded the financial strength rating Century Casualty Company to B (fair) from B+ (good), the Oldwick, N.J.-based rating agency announced last Thursday.
Concurrently, Best revised the outlook on the rating of the Alpharetta, Ga. Insurer to stable from negative.
Deteriorating underwriting results prompted the action, Best said, noting that the company reported underwriting and operating losses reported since 2013 and adding that the weakness in underwriting performance came largely from hotel/motel and convenience store accounts written in 2013 and 2014, and from management’s decision to strengthen case reserves on several accounts within a discontinued 40 percent quota-share with Occidental Fire & Casualty Company of North Carolina.
According to the A.M. Best announcement, Century Casualty currently participates in a 15 percent quota- share with Occidental, effective Sept. 1, 2014.
Best also noted that Century Casualty’s policyholders surplus has declined in recent years on the heels of operating losses but added that Century Casualty maintains adequate risk-adjusted capitalization driven by low underwriting leverage and a conservative investment portfolio.
Source: A.M. Best