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A.M. Best Revises Outlook to Negative for Members of CSAA Insurance GroupA.M. Best has revised the outlook to negative from stable and affirmed the financial strength rating of A+ (Superior) and the issuer credit ratings of "aa-" of the members of CSAA Insurance Group (CSAA), which are CSAA Insurance Exchange (Walnut Creek, CA (News - Alert)), CSAA Affinity Insurance Company (Harrisburg, PA), CSAA General Insurance Company (Indianapolis, IN), CSAA Mid-Atlantic Insurance Company of New Jersey (Hamilton, NJ), CSAA Mid-Atlantic Insurance Company (Harrisburg, PA) and CSAA Fire & Casualty Insurance Company (Indianapolis, IN). These companies operate under an inter-company pooling arrangement. The affirmation reflects CSAA's strong risk-adjusted capitalization, historically favorable operating results and significant personal lines market presence in its selected operating territories, specifically in California. These strengths are partially offset by the recent volatility in reported results, highlighted by sizable underwriting losses reported since 2013, below average returns on revenue and surplus and reduced operating profitability relative to historical levels. Management's recent initiatives to improve overall profitability include stricter underwriting guidelines, rate adjustments, introducing new products and roll-out of new policy and claims administration systems to improve underwriting and generate operating efficiencies and cost savings. Improved operating performance is ependent, however, on successful implementation of these initiatives. Accordingly, negative rating actions may occur if the group's underwriting and operating results do not improve as A.M. Best expects, based on management's projections, or should risk-adjusted capitalization materially weaken. Stabilization of the outlook is contingent upon improved underwriting performance trends. 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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