AM Best Downgrades Issuer Credit Rating of Standard Casualty Company
11 Mai 2023 - 5:24PM
Business Wire
AM Best has downgraded the Long-Term Issuer Credit Rating
(Long-Term ICR) to “bbb” (Good) from “bbb+” (Good) and affirmed the
Financial Strength Rating of B++ (Good) of Standard Casualty
Company (Standard Casualty) (New Braunfels, TX). The outlook of the
Long-Term ICR has been revised to stable from negative, while the
outlook of the FSR is stable.
The Credit Ratings (ratings) reflect Standard Casualty’s balance
sheet strength, which AM Best assesses as strong, as well as its
marginal operating performance, limited business profile and
appropriate enterprise risk management (ERM). Additionally, the
ratings recognize the synergistic advantages and financial support
derived from the company’s relationship with its ultimate parent,
Cavco Industries, Inc. (Cavco) [NASDAQ; CVCO].
The downgrading of the Long-Term ICR reflects the continuing
volatility in Standard Casualty’s operating performance, which
aligns closer to composite peers with a marginal assessment.
Results have primarily been influenced by an escalation in losses
driven by more frequent weather-related events, coupled with
inflationary pressures. Given its scale, the company maintains an
elevated expense position, which creates a need for
better-than-average loss performance as it relates to attaining
overall underwriting profitability. Management has responded by
diversifying into non-hurricane prone states, increasing rates,
limiting flood-exposed business and continuing to implement
stricter underwriting guidelines.
The stable outlooks reflect AM Best’s expectation that the
company will maintain its risk-adjusted capitalization, as measured
by Best’s Capital Adequacy Ratio (BCAR), which is categorized as
strong, as well as sustain improvement in loss reserve development
as evidenced by favorable one-year development in each of the last
two years. Gross and net underwriting leverage remains elevated
when compared with the personal property composite. Standard
Casualty’s operating performance is expected to remain challenged
given its relative product and geographic concentrations. The
company is expected to continue to benefit from advantages gained
from Cavco, a leading producer of manufactured homes in the United
States. Benefits include distribution channel enhancements and
quicker and more cost-efficient repairs, as well as capital
contributions sourced from an affiliated insurance agency. Despite
a challenging reinsurance market, Standard Casualty maintains a
comprehensive reinsurance program, as well as a developed ERM
program to mitigate risk exposures.
This press release relates to Credit Ratings that have been
published on AM Best’s website. For all rating information relating
to the release and pertinent disclosures, including details of the
office responsible for issuing each of the individual ratings
referenced in this release, please see AM Best’s Recent
Rating Activity web page. For additional information
regarding the use and limitations of Credit Rating opinions, please
view Guide to Best's Credit Ratings. For information
on the proper use of Best’s Credit Ratings, Best’s Performance
Assessments, Best’s Preliminary Credit Assessments and AM Best
press releases, please view Guide to Proper Use of Best’s
Ratings & Assessments.
AM Best is a global credit rating agency, news publisher and
data analytics provider specializing in the insurance industry.
Headquartered in the United States, the company does business in
over 100 countries with regional offices in London, Amsterdam,
Dubai, Hong Kong, Singapore and Mexico City. For more information,
visit www.ambest.com.
Copyright © 2023 by A.M. Best Rating
Services, Inc. and/or its affiliates. ALL RIGHTS RESERVED.
View source
version on businesswire.com: https://www.businesswire.com/news/home/20230511005698/en/
Quentin Harris Senior Financial Analyst +1 908
882 1816 quentin.harris@ambest.com
Christopher Sharkey Associate Director, Public
Relations +1 908 439 2200, ext. 5159
christopher.sharkey@ambest.com
Christopher Draghi Associate Director + 1 908
882 1749 chris.draghi@ambest.com
Al Slavin Senior Public Relations Specialist +1
908 439 2200, ext. 5098 al.slavin@ambest.com
Cavco Industries (NASDAQ:CVCO)
Historical Stock Chart
Von Jun 2024 bis Jul 2024
Cavco Industries (NASDAQ:CVCO)
Historical Stock Chart
Von Jul 2023 bis Jul 2024