A.M. Best Co. has revised the outlook to negative from stable and affirmed the financial strength rating of B++ (Good) and the issuer credit rating (ICR) of “bbb” for Dallas National Insurance Company (DNIC) in Dallas, Texas.
The change in outlook reflects the risks associated with DNIC’s latest expansion efforts including the projected level of growth as the company deviates from its core general liability and workers’ compensation offerings, as well as the recent deterioration in operating performance.
A.M. Best is concerned with the inherent risks associated with the current strategy and ultimate profitability with what is a relatively immature book of business. As such, A.M. Best will continue to monitor DNIC’s performance and capitalization over the near term to ensure results are in line with expectations.
The rating affirmation reflects DNIC’s adequate risk-adjusted capitalization, historical operating profitability on its core general liability book of business and the financial support provided by its owner as evidenced by capital contributions in years past.
Source: A.M. Best
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