OLDWICK, N.J.--(BUSINESS WIRE)--A.M. Best has commented that the Long-Term Issuer Credit Rating (Long-Term ICR) of “bbb” of AmTrust Financial Services, Inc. (AFSI) [NASDAQ:AFSI] (headquartered in New York, NY), and all Long-Term Issue Credit Ratings assigned to company-issued securities are unchanged by the announcement of a further delay in the filing of its annual report (10-K) for year-end 2016. Similarly, the Financial Strength Rating (FSR) of A (Excellent) and the Long-Term ICR of “a” of the members of the AmTrust Group and the FSR of A- (Excellent) and Long-Term ICR of “a-” of AmTrust Title Insurance Company are unchanged by the company’s announcement. The outlook of these Credit Rating (ratings) is negative.
The delay in the Securities and Exchange Commission filing and announced restatement of AFSI’s previously filed financial statements for 2014 and 2015 place additional negative pressure on its ratings. However, management has stated that the effect of the restatement is expected to be limited to items related to timing of revenue recognition for certain fee income related to its warranty business and expensing of bonuses, and will have no material effect on the ongoing insurance operations or the statutory entities.
Until the 10-K is filed, A.M. Best cannot determine the extent to which the change in the restated financial results may be material to its assessment of the ratings of AFSI or its subsidiaries. The negative outlook reflects the potential for negative rating action to be taken if the differences in the restated financial results are sufficiently material to cause a reassessment in A.M. Best’s view of the company’s financial condition. In addition, A.M. Best continues to re-evaluate the company’s enterprise risk management profile and capabilities in light of the additional delay in completing the audit and filing the 10-K.
This press release relates to Credit Ratings that have been published on A.M. 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 A.M. Best’s Recent Rating Activity web page. For additional information regarding the use and limitations of Credit Rating opinions, please view Understanding Best’s Credit Ratings.
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