AM Best Downgrades, Withdraws Credit Ratings of Conifer Insurance Group

AM Best downgraded the Financial Strength Rating to C (Weak) from B+ (Good) and the Long-Term Issuer Credit Ratings (Long-Term ICR) to “ccc” (Weak) from “bbb-” (Good) of Conifer Insurance Co. and White Pine Insurance Co.

They are subsidiaries of Conifer Holdings, Inc., a publicly traded property/casualty insurance holding company. Additionally, AM Best has downgraded the Long-Term ICR to “c” (Poor) from “bb-” (Fair) of CHI. Concurrently, AM Best placed all of these ratings under review with negative implications. At the same time, AM Best withdrew all of these ratings as the company has requested to no longer participate in AM Best’s interactive rating process.

All companies are domiciled in Troy, Michigan and collectively referred to as Conifer Insurance Group.

The ratings reflect Conifer’s balance sheet strength, which AM Best assesses as very weak, as well as its marginal operating performance, limited business profile and weak enterprise risk management (ERM).

“The rating actions take into consideration the significant reserve charge taken in the fourth quarter of 2023 and the direct impact this had on the group’s reported surplus, resulting in a revision of Conifer’s balance sheet strength assessment to very weak,” AM Best stated in a release. “The balance sheet strength assessment not only takes in consideration the sudden and material deterioration in reserves and risk-adjusted capitalization, as measured by Best’s Capital Adequacy Ratio (BCAR), but it also considers the regulatory action levels brought on by the group’s failure to meet Michigan’s minimum risk-based capital levels.”

Both CIC and White Pine are in the process of submitting formal plans to the state regulator, which has altered AM Best’s assessment of the group’s business profile, now considered to be limited due to the regulatory oversight and future actions to be taken by management.

Conifer’s ratings were placed under review with negative implications prior to being withdrawn, pending the receipt of a formal business plan as well as other steps and initiatives contemplated by management to improve risk-adjusted capitalization and get both companies back to regulatory compliance levels.

Topics AM Best