OLDWICK, N.J.--(BUSINESS WIRE)--A.M. Best has downgraded the financial strength rating (FSR) to B (Fair) from B++ (Good) and the issuer credit rating (ICR) to “bb” from “bbb+” of SeaBright Insurance Company (SeaBright) (Chicago, IL). The outlook for the ICR has been revised to stable from negative, while the outlook for the FSR remains stable. Concurrently, A.M. Best has withdrawn the ratings due to management’s request to no longer participate in A.M. Best’s interactive rating process.
The ratings reflect SeaBright’s unfavorable underwriting and operating performance in recent years, driven by adverse loss reserve development. Risk-adjusted capitalization declined significantly in 2013, following a 27% decrease in surplus. The surplus decline resulted from capital distributors, redemption of surplus notes and an increase in loss reserves following SeaBright’s transition to run-off during the year.
The methodology used in determining these ratings is Best’s Credit Rating Methodology, which provides a comprehensive explanation of A.M. Best’s rating process and contains the different rating criteria employed in the rating process. Best’s Credit Rating Methodology can be found at www.ambest.com/ratings/methodology.
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