World News: 19:27 GMT Thursday 19th September 2019. [AM Best via Businesswire via SPi World News]
AM Best has revised the outlooks to negative from stable and affirmed the Financial Strength Rating of B+ (Good) and the Long-Term Issuer Credit Rating of “bbb-” of Casualty Underwriters Insurance Company (CUIC) (Salt Lake City, UT).
The Credit Ratings (ratings) reflect CUIC’s balance sheet strength, which AM Best categorizes as strong, as well as its adequate operating performance, limited business profile and marginal enterprise risk management.
The negative outlooks on the ratings reflect CUIC’s declining balance sheet strength and deteriorating operating performance, which result from the increased retention in its private passenger automobile book. Although CUIC’s current risk-adjusted capitalization is still supportive of its current rating level, it declined after CUIC increased its retention on its auto book to 50% from 20% as of Jan. 1, 2019. Additionally, the increased retention has reduced the amount of ceding commissions CUIC receives, which has increased the company’s expense and combined ratios. Therefore, AM Best expects that future underwriting profitability for CUIC’s auto book will deteriorate from past results.
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Business Wire: 19:27 GMT Thursday 19th September 2019
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