By Michael Loney
June 23 - (The Insurer) - AM Best has downgraded the long-term issuer credit ratings of Safety Insurance Group’s main subsidiaries to “a” from “a-plus” and affirmed the financial strength rating of A, citing deterioration in its risk-adjusted capitalisation.
The ratings apply to Boston-based Safety Insurance Company, Safety Indemnity Insurance Company, Safety Property and Casualty Insurance Company and Safety Northeast Insurance Company.
The outlook of the long-term issuer credit ratings has been revised to stable from negative while the outlook of the financial strength rating is stable.
“The long-term ICR downgrades reflect a trend of deterioration in Safety Group’s risk-adjusted capitalisation position since year-end 2021, as measured by Best’s Capital Adequacy Ratio,” AM Best said.
This reduction is attributed to the group’s absolute surplus level declining while net written premium, net reserves and Safety’s probable maximum loss estimate have all increased.
AM Best highlighted that inflationary trends and rate increases have also had a significant impact.
The rating agency assesses Safety’s business profile as neutral due to its consistent position as a top-five carrier in the personal auto, commercial auto and homeowners market in Massachusetts with a modestly diverse product offering.
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