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A.M. Best Revises Outlook to Stable for Castle Key Group MembersA.M. Best has revised the outlook to stable from negative and affirmed the financial strength rating (FSR) of B- (Fair) and the issuer credit ratings (ICR) of "bb-" of the members of Castle Key Group (Castle Key) (headquartered in St. Petersburg, FL). (See below for a detailed listing of the companies.) The ratings reflect Castle Key's marginal overall capitalization when measured on a catastrophe stress-tested basis and geographic business concentration resulting in a susceptibility to catastrophic loss accumulation. Castle Key is the dedicated Florida property writer for its parent company, Allstate Insurance Company (Allstate), and it maintains significant exposure to hurricanes, with a corresponding substantial reliance on catastrophe reinsurance. In addition, Castle Key's reinsurance program relies moderately upon the Florida Hurricane Catastrophe Fund (FHCF). These negative rating factors are partially offset by Castle Key's recently improved operating performance and surplus accumulation, which has been positively impacted by favorable loss activity due to increased rates and an absence of any hurricane events. A.M. Best deviated from its "Rating Members of Insurance Groups" rating criteria by providing more than two FSR levels of rating enhancement to Castle Key's stand-lone assessment. However, the additional rating enhancement acknowledges the historical financial and operational support provided to Castle Key as part of the Allstate organization. Although Castle Key is separately capitalized and not reinsured by Allstate, in A.M. Best's opinion, parental support regarding the claims-paying ability of Castle Key will be maintained commensurate with its rating level in the event of frequent and/or severe hurricane activity. If parental support is not provided, it would be necessary for A.M. Best to re-evaluate the current FSR of A+ (Superior) and ICRs of "aa-" of Allstate and all the remaining members of the Allstate Insurance Group. The FSR of B- (Fair) and ICRs of "bb-" have been affirmed for the following members of the Castle Key Group:
This press release relates to rating(s) that have been published on A.M. Best's website. For all rating information relating to the release and pertinent disclosures, including details of the office responsible for issuing each of the individual ratings referenced in this release, please visit A.M. Best's Ratings & Criteria Center. A.M. Best Company is the world's oldest and most authoritative insurance rating and information source. For more information, visit www.ambest.com. Copyright © 2015 by A.M. Best Company, Inc. ALL RIGHTS RESERVED.
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