NU Online News Service, July 8, 3:15 p.m. EDT

Allstate Floridian Insurance Group, which changed its name last week to Castle Key Group to "clarify" that it is separately capitalized from Allstate Insurance Company, has been downgraded by A.M. Best Co.

Oldwick, N.J.-based Best noted that the action came on the St. Petersburg, Fla.-based group because of its unprofitable experience and exposure to hurricanes and Florida's market dislocations.

Best lowered the group's financial strength rating to "B-minus" (fair) from "B-plus" (very good) and the issuer credit ratings (ICR) to "bb-minus" (poor) from "bbb-minus" (marginal). The outlook for all ratings is negative.

"The rating downgrades and negative outlook are based on Castle Key's continued deterioration in risk-adjusted capitalization, particularly as measured by A.M. Best on a catastrophe stress tested basis," the rating agency said.

"As the group is the dedicated Florida property writer for its parent company, Allstate Insurance Company, Castle Key continues to maintain significant exposure to hurricanes and is susceptible to market dislocations and regulatory changes."

Best added that it expects parental support for claims paying ability despite the group's re-branding. "To the extent such parental support is not provided, it would be necessary for A.M. Best to re-evaluate the ratings of Castle Key and potentially the current FSR of 'A-plus' [very good] and ICRs of 'aa-minus' [excellent] of Allstate and all of the remaining Allstate Insurance Group member companies," the rating agency added.

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A.M. Best Downgrades Allstate&#039;s Castle Key

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A.M. Best Downgrades Allstate's Castle Key