A.M. Best has revised its outlook to negative from stable for Country-Wide Insurance Company, a family-owned auto insurance company based in New York, N.Y.
A.M. Best also affirmed Country-Wide’s Financial Strength Rating of C+ (marginal) and its Long-Term Issuer Credit Rating of b-, ratings the company has held for the past five years, according to A.M. Best’s credit report on the company.
The revised outlooks are due to Country-Wide’s continued decline in risk-adjusted capitalization as a result of its reserve strengthening efforts, according to a release issued by A.M. Best regarding the change. Although Country-Wide has increased all accident year reserves in an effort to curb continuing negative reserve development trends, this has driven its recent drop in surplus, the release added.
Country-Wide is a property and casualty insurance company licensed in New York. The company’s major lines of business are low limits, automobile liability and automobile physical damage for private passenger and commercial vehicles in New York City, primarily in Brooklyn and Queens. The company’s business is generated through brokers within the five boroughs of New York City and Long Island. In 2000, Country-Wide also began operating its wholly owned, full-service general agency, National City Service Agency (NCSA). All of Country-Wide’s agents, representatives, underwriters and adjusters live in the tri-state area in and around New York City, according to the company’s website. Since the company’s underwriting risks are concentrated geographically and by line of business, it is more susceptible to regulatory risk and competitive market pressures, A.M. Best’s credit report stated.
That said, Country-Wide’s other income, when combined with its net investment income, has been able to offset some of its underwriting losses and allow it to maintain competitive rates in some years, the release added.
In the future, A.M. Best said it will monitor the company’s loss reserves, the credit report said. A.M. Best does not comment beyond its press releases. A representative from Country-Wide Insurance Company declined to comment.
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