AM Best Revises Issuer Credit Rating Outlook to Negative for British American Insurance Company

OLDWICK, N.J.--()--AM Best has revised the outlook to negative from stable for the Long-Term Issuer Credit Rating (Long-Term ICR) and affirmed the Financial Strength Rating (FSR) of A (Excellent) and Long-Term ICR of “a+” of British American Insurance Company (BAIC) (Dallas, TX). The outlook of the FSR remains stable.

These Credit Ratings (ratings) reflect BAIC’s balance sheet strength, which AM Best categorizes as strongest, as well as its strong operating performance, neutral business profile and appropriate enterprise risk management.

The outlook of the Long-Term ICR was revised to negative from stable due to BAIC’s deteriorating operating performance, as reflected in high combined ratios during the past two years. Management believes these to be anomalies and has added resources to the claims and reserves review process. The outlook of the FSR remains stable.

BAIC is a single parent captive of Austin Industries Inc., one of the largest construction companies in the United States. This relationship gives BAIC ready access to business derived from its parent, which is focused principally in Texas and across the Southern U.S. BAIC is licensed in Texas and writes all of its direct business there. The company also utilizes fronting carriers for those business activities conducted outside Texas.

Coverages provided to Austin Industries Inc. and its affiliates include workers' compensation, general liability, commercial automobile and surety.

Excess of loss reinsurance above a self-insured retention is maintained for all lines of business. The company benefits from a solid management team with significant depth of experience in the insurance and construction industries who are employed by Austin Industries Inc.

AM Best remains the leading rating agency of alternative risk transfer entities, with more than 200 such vehicles rated in the United States and throughout the world. For current Best’s Credit Ratings and independent data on the captive and alternative risk transfer insurance market, please visit www.ambest.com/captive.

This press release relates to Credit Ratings that have been published on AM 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 AM 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 AM Best press releases, please view Guide for Media - Proper Use of Best’s Credit Ratings and AM Best Rating Action Press Releases.

AM Best is a global rating agency and information provider with an exclusive focus on the insurance industry. Visit www.ambest.com for more information.

Copyright © 2019 by A.M. Best Rating Services, Inc. and/or its affiliates. ALL RIGHTS RESERVED.

Contacts

Fred Eslami
Associate Director

+1 908 439 2200, ext. 5406
fred.eslami@ambest.com

Susan Molineux
Director
+1 908 439 2200, ext. 5829
susan.molineux@ambest.com

Christopher Sharkey
Manager, Public Relations
+1 908 439 2200, ext. 5159
christopher.sharkey@ambest.com

Jim Peavy
Director, Public Relations
+1 908 439 2200, ext. 5644
james.peavy@ambest.com

Contacts

Fred Eslami
Associate Director

+1 908 439 2200, ext. 5406
fred.eslami@ambest.com

Susan Molineux
Director
+1 908 439 2200, ext. 5829
susan.molineux@ambest.com

Christopher Sharkey
Manager, Public Relations
+1 908 439 2200, ext. 5159
christopher.sharkey@ambest.com

Jim Peavy
Director, Public Relations
+1 908 439 2200, ext. 5644
james.peavy@ambest.com