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A.M. Best Withdraws Credit Ratings of Star Casualty Insurance CompanyA.M. Best has downgraded the Financial Strength Rating to B+ (Good) from B++ (Good) and the Long-Term Issuer Credit Rating to "bbb-" from "bbb" of Star Casualty Insurance Company (Star) (Miami, FL). The outlook for these Credit Ratings (ratings) has been revised to negative from stable. Concurrently, A.M. Best has withdrawn the ratings in response to the company's request to no longer participate in A.M. Best's interactive rating process. The rating downgrades are the result of the reduction in Star's risk-adjusted capitalization following recent volatility in its underwriting performance. Significant underwriting losses in 2015 contributed to the sharp decline in Star's policyholders' surplus, an increase in underwriting leverage measures and a material weakening of its risk-adjusted capitalization. The operating losses were driven by adverse loss experience in its personal injury protection (PIP) line of business in Florida. While this loss development is not unique to Star, the business concentration causes the level of loss activity to have a material impact on the organization's financial position. Management has been aggressive to mitigate the impact of these losses and has put several strategies in place to improve results. While manageent expects these strategies to improve operating performance and risk-adjusted capitalization, the benefits derived from these strategies will take time to be fully realized. The negative outlooks reflect the potential for continued operating losses over the intermediate term amid implementation of management's strategies and initiatives that are intended to return the company to operating profitability. 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 see A.M. Best's Recent Rating Activity web page. For additional information regarding the use and limitations of Credit Rating opinions, please view Understanding Best's Credit Ratings. A.M. Best is the world's oldest and most authoritative insurance rating and information source. For more information, visit www.ambest.com. Copyright © 2016 by A.M. Best Rating Services, Inc. and/or its subsidiaries. ALL RIGHTS RESERVED.
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