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A.M. Best Downgrades Ratings of Mount Vernon Specialty Insurance CompanyA.M. Best has downgraded the financial strength rating (FSR) to A- (Excellent) from A++ (Superior) and the issuer credit rating to "a-" from "aa+" of Mount Vernon Specialty Insurance Company (MVSI) (Wayne, PA) . The outlook for both ratings is stable. The downgrade reflects the removal of a quota share reinsurance agreement between MVSI and United States Liability Insurance Company (USLI) (Wayne, PA). MVSI is currently being repositioned within the organization to leverage specific market opportunities as part of a new business unit, Devon Park Specialty Insurance. The ratings recognize MVSI's favorable level of risk-adjusted capitalization, as measured by Best's Capital Adequacy Ratio (BCAR), the experience of the management team, and its new targeted business plan. Furthermore, these ratings benefit from the support MVSI will continue receive from USLI and the ultimate parent, Berkshire Hathaway Inc. (Berkshire) [NYSE: BRK.A and BRK.B]. Partially offsetting these positive rating factors are the concerns with the company's new business profile with regards to marketing, pricing, reserving, loss experience and growth. A.M. Best believes the ratings are appropriately placed at this time. The ratings could be upgraded after the initial development period through beter-than-expected underwriting performance, stronger-than-planned overall operating income or significant gains in its risk-adjusted capital position. The ratings could be impacted negatively from growth outpacing risk-adjusted capital or its operational structure, less than optimal loss experience, or failure to reach sustainable levels of premium. 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. Best's Credit Rating Methodology can be found at www.ambest.com/ratings/methodology. Key insurance criteria reports utilized:
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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