Ratings Affirmed for Atain Specialty Insurance and Subsidiary

May 23, 2012

A.M. Best Co. has upgraded the issuer credit ratings (ICR) to “a+” from “a” and affirmed the financial strength rating (FSR) of A (Excellent) of Atain Specialty Insurance Co., Farmington Hills, Mich., and its wholly-owned subsidiary, Atain Insurance Co., Arlington, Texas, both of which operate under an intercompany pooling agreement.

The outlook for the ICRs has been revised to stable from positive, while the outlook for the FSR is stable.

The upgrading of the ICRs reflects both companies’ sustained underwriting and operating profitability, excellent risk-adjusted capitalization, adequate liquidity measures and management’s adherence to conservative reserving and investing practices.

These actions also take into consideration the future benefits to be derived from both companies’ access to business produced by an affiliated wholesaler, Burns & Wilcox (B&W), and the future profits and continued expense synergies to be garnered from this relationship.

Although the outlook for all ratings is stable, potential rating triggers for positive rating movement exists over the long-term if both companies’ can continue to sustain better than average operating results, further utilize B&W to access profitable business opportunities and maintain strong levels of risk-adjusted capital.

The potential triggers for downward ratings pressure could occur if both companies’ risk-adjusted capital and/or operating performance fall markedly short of A.M. Best’s expectations, including a significant deterioration in loss trends and/or any material changes to its present business strategy or distribution model.

Source: A.M. Best

 

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