Insurance rating service A.B. Best Co. revised the outlook for GMAC Insurance Group to negative on worries that losses suffered by the auto manufacturer's parent could affect the insurer.
The Oldwick, N.J.-based rater reaffirmed the "A-minus" (excellent) financial strength rating for the insurer, but revised the outlook from stable to negative out of concern with risks in GMAC's Residential Capital LLC.
Residential Capital is a mortgage lender, and the volatility in the housing market sector has weakened GMAC's capitalization, liquidity and profitability, Best said.
The negative outlook, Best said, "indicates further material deterioration in GMAC's credit position may likely result in a downgrade" of GMAC Insurance's financial strength rating.
Offsetting the concerns, Best continued, is the insurer's "excellent stand-alone risk adjusted capitalization" and its solid operating results.
According to Highline Data, an affiliate of National Underwriter, GMAC Insurance is ranked as the 19th largest auto insurance carrier in the United States.
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