A.M. Best has revised the outlook to negative for Boston-based insurer Plymouth Rock Assurance Group.
Despite the outlook downgrade, A.M. Best Co. affirmed the
financial strength rating of A- (Excellent) and issuer credit ratings of “a-” of Plymouth Rock Assurance Group (PRAC), which includes the operations of Plymouth Rock Assurance Corporation its reinsured
member, Mt. Washington Assurance Corp. of Concord, New Hampshire.
The negative outlook reflects Plymouth Rock’s recent trend of underwriting losses, its decline in net investment income, elevated
underwriting and unaffiliated investment leverage ratios and its concentration of business in the increasingly competitive Massachusetts private passenger automobile marketplace.
Although the group produced positive pre-tax operating income over the latest five year period, underwriting losses were reported in the latest two year period as a result of increased loss costs and mandated premium rate reductions by the Massachusetts Division of Insurance.
A.M. Best said elevated net written premium and net liability leverage ratios expose Plymouth Rock to pricing errors and reserve deficiencies over the near term.Additionally, elevated unaffiliated investment leverage exposes a significant amount of PRAC’s surplus to continued equity market fluctuations. As one of the top 10 private passenger automobile carriers in Massachusetts, the group’s operating results will continue to be pressured by the increased competition from new entrants in the marketplace.
Source: A.M. Best
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