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AM Best Downgrades Issuer Credit Rating of Members of Auto Club Enterprises Group; Removes From Under Review With Positive Implications, Upgrades Credit Ratings of Wawanesa General Insurance CompanyAM Best has downgraded the Long-Term Issuer Credit Ratings (Long-Term ICR) to "aa-" (Superior) from "aa" (Superior) and affirmed the Financial Strength Rating (FSR) of A+ (Superior) of members of Auto Club Enterprises Insurance Group (ACE) (headquartered in Costa Mesa, Ca). The outlook of the Long-Term ICRs has been revised to stable from negative while the outlook of the FSR is stable. Concurrently, AM Best has removed from under review with positive implications and upgraded the FSR to A+ (Superior) from C++ (Marginal) and the Long-Term ICR to "aa-" (Superior) from "b+" (Marginal) of Wawanesa General Insurance Company (Wawanesa General) (San Diego, CA) a newly added reinsured subsidiary of ACE. The outlook assigned to these Credit Ratings (ratings) is stable. See below for a detailed list of companies. The ratings reflect ACE's balance sheet strength, which AM Best assesses as strongest, as well as its adequate operating performance, favorable business profile, and appropriate enterprise risk management. The Long-Term ICR downgrade considers ACE's earnings deterioration in the last two years, primarily due to rising claims frequency, increased claims costs and significant weather-related property losses in Midwestern states. While ACE's operating results have outperformed its private passenger auto and homeowners composite peers for many years, 2022 and 2023 proved to be challenging for the group, similar to many of its industry peers. Consequently, the group's assessment for its operating performance was revised to adequate from strong. AM Best notes that ACE has implemented detailed strategic initiatives to restore underwriting profitability, which include rate changes, increased deductibles and refined claims management. AM Best expects the group's earnings to continue improving gradually in2024. The FSR of A+ (Superior) has been affirmed while the Long-Term ICR has been downgraded to "aa-" (Superior) from "aa" (Superior), with the outlook of the FSR remaining stable and the outlook of the Long-Term ICRs revised to stable from negative for the following members of Auto Club Enterprises Insurance Group:
This press release relates to Credit Ratings that have been published on AM 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 AM Best's Recent Rating Activity web page. For additional information regarding the use and limitations of Credit Rating opinions, please view Guide to Best's Credit Ratings. For information on the proper use of Best's Credit Ratings, Best's Performance Assessments, Best's Preliminary Credit Assessments and AM Best press releases, please view Guide to Proper Use of Best's Ratings & Assessments. AM Best is a global credit rating agency, news publisher and data analytics provider specializing in the insurance industry. Headquartered in the United States, the company does business in over 100 countries with regional offices in London, Amsterdam, Dubai, Hong Kong, Singapore and Mexico City. For more information, visit www.ambest.com. Copyright © 2024 by A.M. Best Rating Services, Inc. and/or its affiliates. ALL RIGHTS RESERVED.
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