A.M. Best Co. has downgraded the financial strength rating to C++ (Marginal) from B (Fair) of the property/casualty subsidiaries of Optimum General Inc.
The subsidiaries include: Optimum Farm Insurance, Optimum Insurance Company (both of Quebec), Optimum Frontier Insurance Company (Ontario), Optimum West Insurance Company (British Columbia) and Optimum Property and Casualty Insurance Co., (Texas).
The rating action reflects Optimum’s continuing weak operating results and the strain losses have placed on its capital position. Based on A.M. Best’s assessment of capital adequacy, the company’s current level of capitalization is marginally able to support various risks. During 2001 and continuing through the first half of 2002, the group’s unfavorable results were driven by difficult market conditions in Canada and losses in its Ontario, Texas and Atlantic operations.
Despite the recent actions taken by management, continued uncertainties related to future profitability and capital position remain. Further, these plans will require time and Optimum’s trends do not exhibit any evidence these plans will adequately bolster its capital position in the near term.
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