S&P placed its “A+” counterparty credit and financial strength ratings on American Excess Insurance Exchange RRG (AEIX), American Diversified Reinsurance Ltd., and Premier Insurance Exchange RRG (PRx)—which are the members of Premier Insurance Group—on CreditWatch with negative implications.
The rating action reflects the increase in severity of claims experience at AEIX, resulting in statutory underwriting losses of $16.6 million in 1999, $26.7 million in 2000, and $5.5 million in the first quarter of 2001. Statutory capital has declined 46 percent to $74.1 million as of March 31, 2001, from $138.4 million at year-end 1998.
Reported results are well below the earnings expectations for AEIX and well below benchmark performance levels at the existing ratings level.
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