AM Best Revises Issuer Credit Rating Outlook to Negative for The Dentists Insurance Company

OLDWICK, N.J.--(BUSINESS WIRE)--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 the Long-Term ICR of “a+” (Excellent) of The Dentists Insurance Company (TDIC) (Sacramento, CA). The outlook of the FSR is stable.

The Credit Ratings (ratings) reflect TDIC’s balance sheet strength, which AM Best assesses as strongest, as well as its adequate operating performance, favorable business profile and appropriate enterprise risk management.

The revision of the Long-Term ICR outlook to negative from stable reflects AM Best’s concern over TDIC’s business profile due to its significant product/geographic concentration, driving underwriting results that compare unfavorably with peers and the challenges associated with improving results in current market conditions. While management has numerous initiatives aimed at enhancing performance, underwriting losses are expected to persist in the years ahead given the company’s geographic concentration in various tort reform-challenged states. Additionally, TDIC’s results in recent years have been impacted by unfavorable loss cost trends on its property line of business due to economic inflation and supply chain disruptions, as well as catastrophe losses related to the January 2025 California wildfires and associated reinstatement premiums to a lesser extent. Although management has implemented significant rate increases, property loss ratios remain elevated. The company’s status as an admitted writer whose rate filings require approval has contributed toward challenges achieving rate adequacy. Overall, the company’s current business profile assessment of favorable may be lowered due to the impact of product/geographic concentration on the company’s results.

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