A.M. Best Withdraws Ratings of Affirmative Insurance Holdings, Inc. and Its Subsidiaries
A.M. Best Co. has downgraded the financial strength rating to C-
(Weak) from C (Weak) and the issuer credit ratings (ICR) to “cc” from
“ccc” of Affirmative Insurance Company (Affirmative) (Burr Ridge,
IL) and its wholly owned subsidiary, USAgencies Casualty Insurance
Company, Inc. (Baton Rouge, LA). In addition, A.M. Best has affirmed
the ICR of “c” of the publicly traded parent, Affirmative Insurance
Holdings, Inc. (headquartered in Addison, TX) [NASDAQ: AFFM]. The
outlook for all ratings is negative. Concurrently, A.M. Best has
withdrawn the ratings as the parent has requested to no longer
participate in A.M. Best’s interactive rating process.
These rating actions are a result of the organization’s continued loss
of policyholders’ surplus, weakened risk-adjusted capitalization,
unfavorable operating performance and solvency issues due to failure to
meet financial debt covenants and regulatory reserve funding
requirements. In addition, there are serious concerns regarding the
parent’s ability to repay senior debt due January 30, 2014.
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.
A.M. Best Company is the world's oldest and most authoritative
insurance rating and information source. For more information, visit www.ambest.com.
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