S&P Cuts Atlantic Mutual Ratings

NU Online News Service, June 26, 10:09 a.m. EDT, New York?Standard & Poor's Ratings Services has downgraded the credit rating for Atlantic Mutual Companies and its subsidiaries to "Triple-B" from "Triple-B-Plus", citing the company's "weak underwriting performance."

The counterparty risk of default and financial strength assessments for a number of Atlantic Mutual units?including Atlantic Mutual Insurance, Centennial Insurance and Atlantic Specialty Insurance?will be affected by the New York-based S&P's downgrade. The outlook on all these companies is negative, S&P said.

Additionally, the ratings agency has also lowered its surplus note rating on Atlantic Mutual Companies to "Double-B-Plus" from "Triple-B-Minus".

S&P listed a number of concerns about Atlantic Mutual's financial health. They include: the company's adverse reserve development over the last two years; reduced investment income; increased reliance on financial reinsurance to maintain surplus; the potential for further reserve strengthening, and limited financial flexibility.

John Iten, credit analyst at S&P, commented that Atlantic Mutual is pursuing "various initiatives" to reduce its reliance on financial reinsurance for surplus relief and to improve operating results. Still, Mr. Iten warned, if the company fails to fully execute these initiatives, "ratings could be lowered further."

Headquartered in New York, Atlantic Mutual Companies offers commercial, personal, and marine property-casualty insurance to individuals and businesses. In 2002, the company reported $17.7 million in net income and $754 million in sales.

Want to continue reading?
Become a Free PropertyCasualty360 Digital Reader

Your access to unlimited PropertyCasualty360 content isn’t changing.
Once you are an ALM digital member, you’ll receive:

  • Breaking insurance news and analysis, on-site and via our newsletters and custom alerts
  • Weekly Insurance Speak podcast featuring exclusive interviews with industry leaders
  • Educational webcasts, white papers, and ebooks from industry thought leaders
  • Critical converage of the employee benefits and financial advisory markets on our other ALM sites, BenefitsPRO and ThinkAdvisor
NOT FOR REPRINT

© 2024 ALM Global, LLC, All Rights Reserved. Request academic re-use from www.copyright.com. All other uses, submit a request to [email protected]. For more information visit Asset & Logo Licensing.