New York’s Atlantic Mutual Insurance Co. announced that it is expanding Internet related coverage to protect against losses caused by identity fraud, theft of credit card numbers, computer viruses and losses to business property in the home. Standard & Poor’s, however, lowered its various ratings on Atlantic and its subsidiaries to triple-‘B’- plus from single-‘A’-minus.
The expansion of the Atlantic Master Plan (R) and Distinctive Home lines for business and personal coverage comes in response to the enormous expansion the company has seen in property losses and theft related to the Internet. Commenting on the changes Sr. VP of the Personal Insurance Division Daniel H Olmsted stated, “By expanding our AMP and DH policies to address these concerns, we are continuing our commitment to provide the most comprehensive personal lines coverage in the industry today.”
Atlantic’s enhanced coverage broadens several key definitions in its policies. “Money” is defined not only as cash, but also as credit or debit card payments. The company also expanded coverages on a number of its other personal lines.
In announcing its rating action Standard & Poor’s stressed Atlantic’s “poor earnings, weakened yet still strong capital position, good liquidity, and challenging business position,” as well as its strong premium growth. It’s chief concern was the estimated $32 million net loss Atlantic suffered from the WTC attacks, which will increase its combined ratio to 116 percent, and its high expense ratios.
S&P noted that “Atlantic Mutual’s earnings adequacy ratio, based on Standard & Poor’s model, has been at single-‘B’ levels or below for each of the past five years. Expense initiatives started in 2001 should contribute to improved results in 2002-2003.” It indicated that it expects Atlantic “to reduce its expense ratio to 30%-32%; improve its operating results, as measured by the combined ratio, to 105%-108%; reduce net premium growth to flat to slightly declining; and improve ROR to 4%-6%.”|”atlantic, mutual, expands, internet, fraud, coverage;, snp, lowers, ratings
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