A.M. Best has placed under review with negative implications the financial strength rating of “A-” (Excellent) and the issuer credit rating of "a-" of Allied Professionals Insurance Company, A Risk Retention Group (APIC) of Scottsdale, Arizona.
This rating action reflects A.M. Best's concerns with the decline in risk-adjusted capitalisation caused by advancement in reserve positions from deteriorating loss experience in the chiropractic specialty along with growth in the overall premium base.
Company management has presented several remedial actions to reverse the negative claims trend and strengthen capitalisation.
A.M. Best has commented that it perceives: “A degree of execution risk involved with the implementation of APIC's plan of improvement and uncertainty regarding the overall impact these actions will have upon the company's balance sheet and income statement in 2014 and 2015.”
The ratings are to remain under review pending the implementation of the company's action plan and completion of A.M. Best's analysis on how these initiatives impact APIC's risk-adjusted capitalisation and financial performance in the near and mid-term.
APIC recently emerged victorious from a legal battle after being sued by chiropractor Dr Brett Speece regarding an arbitration provision in his insurance policy.
The case concluded after the Nebraska Supreme Court overruled the district court’s decision, citing the Liability Risk Retention Act.
