A.M. Best Co. has downgraded the financial strength rating to C (Weak) from B (Fair) and issuer credit rating to “ccc” from “bb” of National Automotive Insurance Co. (National Automotive) of Metairie, La. The outlook for both ratings is negative.
According to A.M. Best, the rating downgrades reflect National Automotive’s significant decline in capitalization following adverse reserve development in its non-standard automobile business, which resulted in the need for significant reserve strengthening in the fourth quarter of 2012, causing a material decline in its surplus.
National Automotive’s adverse reserve development was driven by increased auto liability losses and an increase in the required minimum statutory automobile limits in Louisiana.
The negative outlook reflects National Automotive’s reduced surplus and decline in its risk-adjusted capitalization. The outlook further considers the company’s ongoing challenges to improve underwriting results over the near term and avoid additional surplus losses.
Factors that could result in future negative rating actions include a continued deterioration in National Automotive’s underwriting performance, continued adverse reserve development or erosion of its capital base.
Source: A.M. Best
Cyber Attacks On Banks More Serious Than Public Realizes
E&O Insights: Restaurant and Tavern Risks
CEA’s First CIO Reflects C-Suite Trend
Golf and Country Clubs Weather the Storm
Midwest AGs Go After Storm-Chasing Roofing Companies
Medical Malpractice Payouts Not Driving Up Health Costs: Study
Florida Lawmakers Approve Medical Malpractice Reform
Industry Results Show Positive Signs for Workers’ Comp Line, NCCI’s Chief Economist Says
Sign up to receive insurance news alerts!
