A.M. Best Revises Citadel Outlook To Negative
A.M. Best has revised the outlooks to negative from stable and affirmed the Financial Strength Rating [FSR] of A- [Excellent] and the Long-Term Issuer Credit Rating [Long-Term ICR] of “a-” of Bermuda-based Citadel Reinsurance Company Limited.
A statement from the ratings agency said, “In addition, A.M. Best has revised the outlooks to negative from stable and affirmed the FSR of B+ [Good] and Long-Term ICR of “bbb-” of Citadel Re’s subsidiary, American Millennium Insurance Company [AMIC] [Bridgewater, NJ].
“Concurrently, A.M. Best affirmed the FSR of B++ [Good] and Long-Term ICR of “bbb+” of Great Falls Insurance Company [Great Falls] [Auburn, ME]. The outlook of these Credit Ratings [ratings] is stable.
“The revised outlooks for Citadel Re follow two consecutive years of operating losses at the company, while the revised outlooks for AMIC reflect concerns regarding future underwriting performance following the company’s plans for moderate growth.
“Negative rating action could occur if operating performance at Citadel Re declines further and demonstrates volatility, impacting negatively on earnings and risk-adjusted capitalization.
“AMIC’s ratings could be negatively impacted if the company’s growth results in deterioration of underwriting performance, coupled with a decrease in risk-adjusted capitalization. A material shift in risk profile of the companies that could potentially undermine the stability and profitability of the companies also could lead to negative rating action.”
