AM Best Places Credit Ratings of Universal North America Insurance Company Under Review With Negative Implications

OLDWICK, N.J.--(BUSINESS WIRE)--AM Best has placed under review with negative implications the Financial Strength Rating of B+ (Good) and the Long-Term Issuer Credit Rating of “bbb-” (Good) of Universal North America Insurance Company (UNAIC) (Arlington, TX).

The Credit Rating (rating) actions on UNAIC are due to a loss of policyholder surplus of approximately 12% and a corresponding decline in overall risk-adjusted capitalization and balance sheet metrics through second-quarter 2023, owing to severe convective storms. In addition, policyholder surplus decreased further in third-quarter 2023, because of the company’s exposure to the Hawaiian fires. The negative implications take into consideration the uncertainty surrounding the balance sheet strength and operating performance assessments. Prior to being placed under review, UNAIC’s ratings had a negative outlook due to continued pressure on the balance sheet strength and operating performance assessments.

Historically, the ultimate parent, Universal Group, Inc., has provided support and remains committed to adequately capitalizing the company. In the most recent five-year period, Universal Group Inc. has made capital contributions of $42.5 million.

The ratings will remain under review until AM Best can fully analyze the company’s proposed capital management strategy. However, in the absence of an adequate capital management plan that is supportive, the ratings will most likely be downgraded.

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 Guide to Best's Credit Ratings. For information on the proper use of Best’s Credit Ratings, Best’s Performance Assessments, Best’s Preliminary Credit Assessments and AM Best press releases, please view Guide to Proper Use of Best’s Ratings & Assessments.

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