Concurrently, A.M. Best has downgraded the FSR to A- (Excellent) from A (Excellent) and ICRs to “a-” from “a” for the four entities acquired from Unitrin, Inc (Chicago, IL) on June 2, 2008: Milwaukee Casualty Insurance Company (MCIC) (Brookfield, WI), Security National Insurance Company (SNIC) (Dallas, TX), Trinity Universal Insurance Company of Kansas, Inc. (TUIC) (Topeka, KS) and Trinity Lloyds Insurance Company (Trinity Lloyds) (Dallas, TX). These ratings have been placed under review with developing implications pending approval of an intercompany reinsurance agreement with AmTrust. Upon completion, the outlook on AmTrust will be extended to these four entities.
The ratings of AmTrust reflect the consolidated group’s solid balance sheet strength, sustained strong operating performance within its niche markets and the benefits derived from AFSI, including AFSI’s commitment to maintain sufficient capital as well as extend additional capital should it be needed to support the group’s expanding operations.
Partially offsetting these positive rating factors are the group’s aggressive growth in both premium volumes and associated liabilities in recent years, the inherent risk in integrating new business acquired through renewal rights on existing books of business and the potential strain that this growth places on the group’s risk-adjusted capitalization. Despite these concerns, the outlook is supported by AmTrust’s strong operating results, access to capital and commitment to prudent underwriting.
MCIC, SNIC, Trinity Lloyds and TUIC provide the group additional diversification with a platform that currently writes small commercial packages, workers’ compensation and commercial automobile policies.
For Best’s Ratings, an overview of the rating process and rating methodologies, please visit http://www.ambest.com/ratings. BN-NJ-06-12-2008 1044 ET #