A.M. Best has downgraded American Transportation Group Insurance (ATGI) Risk Retention Group’s financial strength rating to C++ (Marginal) from B (Fair) and the Long-Term Issuer Credit Rating to “b” from “bb”.
The outlook of these credit ratings has been revised to negative from stable.
A.M. Best noted that the ratings have been withdrawn after the company requested to no longer participate in its interactive rating process.
The rating company categorises ATGI’s balance sheet strength as very weak as well as its adequate operating performance, limited business profile and appropriate enterprise risk management.
It explained that the rating downgrades and revision of outlooks reflect a material erosion in ATGI’s balance sheet strength as of 31 December 2019, relative to its initial business plan.
The annualised growth in net written premiums and loss and loss adjustment expense reserves have outpaced growth in the policyholders’ surplus significantly over the past year, A.M. Best said.
The rating firm highlighted that simultaneous conditions have resulted in a significant shock to ATGI’s balance sheet strength and created uncertainty around its projections of the company’s balance sheet strength in the near term.
