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| [June 29, 2012] |
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A.M. Best Downgrades and Withdraws Ratings of Safe Harbor Insurance Company
OLDWICK, N.J. --(Business Wire)--
A.M. Best Co. has downgraded the financial strength rating (FSR)
to C (Marginal) from B (Fair) and issuer credit ratings (ICR) to "ccc"
from "bb" of Safe Harbor Insurance Company (Safe Harbor)
(Tallahassee, FL). The outlook for both ratings is negative.
Concurrently, A.M. Best has withdrawn the ratings in response to Safe
Harbor management's request to no longer participate in A.M. Best's
interactive rating process.
The rating actions consider Safe Harbor's declining risk-adjusted
capitalization, resulting from a significant increase in its elevated
underwriting leverage position caused by a 104% increase in net written
premiums in 2011. Additionally, the ratings consider the company's
geographic concentration of risk, susceptibility to weather-related
events as a Florida property writer and its elevated underwriting
expese ratio.
These negative rating factors are offset by Safe Harbor's favorable
operating performance since inception and implicit support from its new
parent, RM Ocean Harbor Holding, Inc. The negative outlook reflects
concern about Safe Harbor's susceptibility to multiple severe
weather-related events.
The methodology used in determining these ratings is Best's Credit
Rating Methodology, which provides a
comprehensive explanation of A.M. Best's rating process and contains the
different rating criteria employed in the rating process. Key criteria
utilized include: "Risk Management and the Rating Process for Insurance
Companies"; "Understanding BCAR for Property/Casualty Insurers"; "Rating
Members of Insurance Groups"; and "Insurance Holding Company and Debt
Ratings." Best's Credit Rating Methodology can be found at www.ambest.com/ratings/methodology.
Founded in 1899, 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 © 2012 by A.M. Best Company, Inc. ALL RIGHTS
RESERVED.
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