A.M. Best Revises Issuer Credit Rating Outlook to Negative for ACMAT Corporation and ACSTAR Insurance Company

OLDWICK, N.J.--()--A.M. Best has revised the outlook to negative from stable and affirmed the Long-Term Issuer Credit Rating (Long-Term ICR) of “bbb+” of ACMAT Corporation (ACMAT) (Farmington, CT) [OTC Market: ACMT]. A.M. Best also has revised the outlook to negative from stable for the Long-Term ICR and affirmed the Financial Strength Rating (FSR) of A (Excellent) and the Long-Term ICR of “a+” of ACMAT’s wholly owned subsidiary, ACSTAR Insurance Company (ACSTAR) (Chicago, IL). The outlook for the FSR remains stable.

The Credit Ratings (ratings) reflect ACSTAR’s balance sheet strength, which A.M. Best categorizes as very strong, as well as its strong operating performance, neutral business profile and appropriate enterprise risk management.

The rating actions are based on a material reduction in ACSTAR’s premiums in recent years, which has led to a diminishing business profile. In addition, while results have historically benefited from management’s niche specialty orientation in the surety sector, prudent underwriting discipline and a conservative loss reserving philosophy, the trend of declining premiums has resulted in narrowed underwriting results in recent years. The negative trend in premiums partly reflects highly competitive market conditions in the niche.

Negative rating actions could occur if underwriting and operating results show a continued negative trend, if risk-adjusted capitalization materially weakens or if the company’s business profile further diminishes, evidenced by a continued downward trend in premiums. Positive rating actions could occur if the company exhibits a trend of improved underwriting performance combined with stable to higher premiums.

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.

A.M. Best is the world’s oldest and most authoritative insurance rating and information source. For more information, visit www.ambest.com.

Copyright © 2018 by A.M. Best Rating Services, Inc. and/or its affiliates. ALL RIGHTS RESERVED.

Contacts

A.M. Best
Robert Valenta, +1 908-439-2200, ext. 5291
Senior Financial Analyst
robert.valenta@ambest.com
or
Raymond Thomson, CPCU, ARe, ARM, +1 908-439-2200, ext. 5621
Associate Director
raymond.thomson@ambest.com
or
Christopher Sharkey, +1 908-439-2200, ext. 5159
Manager, Public Relations
christopher.sharkey@ambest.com
or
Jim Peavy, +1 908-439-2200, ext. 5644
Director, Public Relations
james.peavy@ambest.com

Contacts

A.M. Best
Robert Valenta, +1 908-439-2200, ext. 5291
Senior Financial Analyst
robert.valenta@ambest.com
or
Raymond Thomson, CPCU, ARe, ARM, +1 908-439-2200, ext. 5621
Associate Director
raymond.thomson@ambest.com
or
Christopher Sharkey, +1 908-439-2200, ext. 5159
Manager, Public Relations
christopher.sharkey@ambest.com
or
Jim Peavy, +1 908-439-2200, ext. 5644
Director, Public Relations
james.peavy@ambest.com