OLDWICK, N.J.--(BUSINESS WIRE)--A.M. Best has downgraded the Financial Strength Rating (FSR) to B (Fair) from B+ (Good) and the Long-Term Issuer Credit Rating (Long-Term ICR) to “bb+” from “bbb-” of Anchor General Insurance Company (Anchor General) (San Diego, CA) and Pacific Star Insurance Company (Pacific Star) (Madison, WI), a subsidiary of Anchor General. The outlook for the FSR has been revised to stable from negative, while the outlook for the Long-Term ICRs remains negative.
The Credit Ratings (ratings) of Anchor General reflect its balance sheet strength, which A.M. Best categorizes as adequate, as well as adequate operating performance, limited business profile and appropriate enterprise risk management (ERM). The ratings of Pacific Star reflect its balance sheet strength, which A.M. Best categorizes as very strong, as well as adequate operating performance, limited business profile, appropriate ERM and rating drag due to its direct ownership by Anchor General.
The downgrade of Anchor General’s ratings is based on the deterioration in recent years of its underwriting results, operating performance, statutory surplus and risk-adjusted capitalization. This deterioration was driven by an influx of new business growth, unfavorable California non-standard private passenger auto loss trends and Texas storm losses. While management has implemented numerous corrective measures and strategies, which include rate changes, agency management and risk mitigation initiatives, the impact of these changes has not materially improved overall results.
The downgrade of Pacific Star was based on the downgrade of its direct parent, Anchor General.
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