View this article online: https://www.insurancejournal.com/news/east/2016/08/11/422990.htm
A.M. Best has revised its outlook from stable to negative for New York-based Lancer Insurance Co. and Lancer Indemnity Co..
The move comes as Lancer Insurance’s underwriting performance declined in the past several years, particularly in 2015. This can primarily be attributed to an adverse loss reserve development in the previous year in the company’s commercial auto line, which led to overall operating performance falling short of projections and a decline in risk-adjusted capitalization. The revised outlook for Lancer Indemnity also reflects underwriting losses in its commercial multi-peril and general liability lines, resulting in similar outcomes last year.
That said, A.M. Best affirmed its financial strength rating of A- and its issuer credit rating of a- for Lancer Insurance, which points to the company’s solid market presence in the specialty transportation market, adequate risk-adjusted capitalization and overall favorable returns in the most recent five and 10 year periods.
Lancer Insurance’s ratings could be further impacted if its underwriting and overall profitability fall short of A.M Best’s expectations due to competitive conditions or a lack of underwriting discipline. A material decline in the company’s risk-adjusted capitalization could also negatively impact ratings. Lancer Indemnity’s ratings could see a decline as well if the firm demonstrates consistent unfavorable operating results or a material drop in risk-adjusted capitalization.
Spokespeople for Lancer Insurance and A.M. Best declined Insurance Journal‘s request to comment in an email.