A.M. Best has downgraded the financial strength rating of Security America Risk Retention Group (SARRG), based in Burlington, Vermont, from “B++ (Good)” to “B+ (Good)”.
The ratings agency also downgraded SARRG’s long-term issuer credit rating to “bbb-” from “bbb”.
The downgrades come after a “sizeable surplus decrease” of approximately 27 percent as of Q3 2016, A.M. Best said.
The company’s ratings were also affected by a “sizeable claim” that was not reimbursable by the risk retention group’s reinsurance programme.
According to A.M. Best, the net underwriting loss reflects the increased loss and loss adjustment expense related to the claim, which contributed to an unfavourable combined ratio of more than 200 percent for the first nine months of this year.
SARRG was formed by the Electronic Security Association and incorporated as a risk retention group to offer general and professional liability coverage.
