OLDWICK, N.J.--(BUSINESS WIRE)--A.M. Best has upgraded the Financial Strength Rating (FSR) to A- (Excellent) from B++ (Good) and the Long-Term Issuer Credit Rating (Long-Term ICR) to “a-” from “bbb” of Lancer Indemnity Company (Long Beach, NY). Additionally, A.M. Best has affirmed the FSR of A- (Excellent) and the Long-Term ICR of “a-” of Lancer Insurance Company (Chicago, IL). The outlook of these Credit Ratings (ratings) is negative.
The rating upgrades of Lancer Indemnity Company recognize the explicit support provided by a 100% quota share reinsurance agreement, including loss reserve development cover, from Lancer Insurance Company effective July 1, 2017. The rating affirmations of Lancer Insurance Company reflect its leading market presence in the specialty transportation market, adequate risk-adjusted capitalization, and adequate returns over the most recent five- and ten-year periods.
The negative rating outlooks are due to volatility in Lancer Insurance Company’s underwriting results over the past five years that was largely from the recognition of net adverse loss reserve development in its commercial auto liability line.
The ratings could be impacted negatively should competitive conditions or significant adverse loss reserve development result in underwriting and overall profitability measures that fall short of A.M. Best’s expectation, or should there be a material decline in the group’s risk-adjusted capitalization.
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. For information on the proper media use of Best’s Credit Ratings and A.M. Best press releases, please view Guide for Media - Proper Use of Best’s Credit Ratings and A.M. Best Rating Action Press Releases.
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