AM Best has revised the outlooks to positive from stable and affirmed the Financial Strength Rating of B (Fair) and the Long-Term Issuer Credit Ratings of “bb+” (Fair) of Anchor General Insurance Co. in San Diego, Calif., and Pacific Star Insurance Co. in Madison, Wis., a subsidiary of Anchor General.
The Credit Ratings of Anchor General reflect its balance sheet strength, which AM Best assesses as adequate, as well as adequate operating performance, limited business profile and appropriate enterprise risk management. The ratings of Pacific Star reflect its balance sheet strength, which AM Best assesses as very strong, as well as adequate operating performance, limited business profile, appropriate ER, and rating drag due to direct ownership by Anchor General.
“The revision of Anchor General’s outlooks to positive is based on its increased balance sheet strength in recent years, driven by improved operating performance, policyholders’ surplus growth, improving loss reserving trends and reduced premium volume over a five-year period,” AM Best stated. “The revision of Pacific Star’s outlooks to positive is based on reduced rating drag from its parent, Anchor General.”
According to AM Best, the management of Anchor General and Pacific Star has implemented numerous corrective measures and strategies in recent years, including significant rate increases, agency management and risk mitigation initiatives.
“The impact of these changes has materially improved Anchor General and Pacific Star’s underwriting results, operating earnings, surplus position, along with underwriting leverage and risk-adjusted capitalization,” AM Best stated. “These positive rating factors are partially offset by Anchor General and Pacific Star’s limited business profiles, primarily due to geographic and product concentration as predominantly California private passenger non-standard auto writers, which exposes both companies to market, regulatory, legislative and judicial risks.”
Topics California Trends AM Best
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