OLDWICK, N.J.--(BUSINESS WIRE)--AM Best has revised the outlooks to stable from negative for the Long-Term Issuer Credit Ratings (Long-Term ICR) and affirmed the Financial Strength Rating (FSR) of B (Fair) and the Long-Term ICR of “bb+” 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 outlooks of the FSRs remain stable.
The Credit Ratings (ratings) of Anchor General reflect its balance sheet strength, which AM 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 AM 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.
Anchor General’s revised Long-Term ICR outlook to stable from negative is based on its increased balance sheet strength in recent years, driven by improved operating performance, policyholders’ surplus growth and reduced net premiums written. Pacific Star’s revised Long-Term ICR outlook to stable from negative is based on reduced ratings drag from its parent, Anchor General.
The management of Anchor General and Pacific Star has implemented numerous corrective measures and strategies in recent years, which included rate changes, agency management and risk mitigation initiatives. The impact of these changes has materially improved Anchor General’s and Pacific Star’s underwriting results, operating earnings, surplus position, along with underwriting leverage and risk-adjusted capitalization. These positive rating factors are partially offset by Anchor General’s and Pacific Star’s limited business profiles, primarily due to geographic and product concentration as predominantly California private passenger non-standard auto writers, which exposes both companies to market, regulatory, legislative and judicial risks.
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