A.M. Best has downgraded the financial strength rating (FSR) to “B- (Fair)” from “A- (Excellent)” and the issuer credit rating (ICR) to “bb-“ from “a-“ of Madison Insurance Company.
At the same time, A.M. Best has withdrawn both ratings due to Madison’s request to no longer participate in the rating process.
The rating downgrades reflect a sizeable commutation of reserves from Madison’s primary reinsurer and the negative impact on its best capital adequacy ratio.
Simultaneously, A.M. Best has affirmed the FSR of “A- (Excellent)” and ICR of “a-” of Accident Insurance Company. Both companies are domiciled in Columbia, South Carolina.
Accident Insurance writes risks with low severity and frequency while attending to strict underwriting standards and controls, aggressive claims management practices, conservative investment policies and objectives, high quality infrastructure and technology-based services.
The ratings reflect Accident Insurance’s strong balance sheets and liquidities as well as its conservative operating strategies. The ratings also recognise the company’s experienced management team, favorable operating results and ratemaking and reserving practices.
“Partially offsetting these positive rating factors is the company's dependence on reinsurance and its low retentions,” said A.M. Best in a recent statement.
