A.M. Best has withdrawn the credit ratings of Security America Risk Retention Group (SARRG), after the company requested to no longer participate in the rating agency’s interactive rating process.
SARRG made the request after A.M. Best downgraded the company’s financial strength rating from “B+ (good)” to “B (fair)” and its long-term issuer credit rating from “bbb-” to “bb+”.
The outlook of the financial strength rating was also revised from stable to negative while the outlook of the long-term issuer credit rating was set at negative.
The reduced ratings were reflective of SARRG’s balance sheet, which A.M. Best categorised as adequate, in addition to its marginal operating performance, limited business profile and marginal enterprise risk management.
The risk-adjusted capitalisation of SARRG is currently strong, according to Best’s Capital Adequacy Ratio, however, it has diminished in recent years.
The ratings agency suggested that the general and professional liability providers have also suffered adverse loss reserve development and unfavourable profitability measures.
