A.M. Best Downgrades Ratings of Southern Farm Bureau Property Insurance Company; Places Under Review with Negative Implications.OLDWICK, N.J. -- A.M. Best Co. has downgraded the financial strength rating (FSR (Free System Resource) In Windows 3.x, the amount of unused memory in various 64K blocks reserved for managing current applications. Every open window takes some space in this area. See Windows memory limitation. ) to A- (Excellent) from A (Excellent) and issuer credit rating (ICR (Intelligent Character Recognition or Image Character Recognition) The machine recognition of hand-printed characters as well as machine printing that is difficult to recognize. ) to "a-" from "a" of Southern Farm Bureau Property Insurance Company (Property) (Ridgeland, MS). Concurrently, A.M. Best has placed the ratings under review with negative implications. These rating actions reflect A.M. Best's review of the company's financial position following an assessment of updated loss estimates associated with Hurricanes Katrina and Rita. As a result of these hurricane losses, Property's risk-adjusted capitalization capitalization n. 1) the act of counting anticipated earnings and expenses as capital assets (property, equipment, fixtures) for accounting purposes. 2) the amount of anticipated net earnings which hypothetically can be used for conversion into capital assets. did not adequately support its property catastrophe business profile at its former rating level. Further, although risk-adjusted capitalization is expected to improve as reinsurance The contract made between an insurance company and a third party to protect the insurance company from losses. The contract provides for the third party to pay for the loss sustained by the insurance company when the company makes a payment on the original contract. recoverables related to Hurricanes Katrina and Rita are collected, capital remains exposed to potential catastrophe losses for the remainder of 2005. The under review status reflects continued uncertainty with the ultimate losses and potential adverse development on Hurricane Rita Hurricane Rita was the fourth-most intense Atlantic hurricane ever recorded and the most intense tropical cyclone ever observed in the Gulf of Mexico. Rita caused $11.3 billion in damage on the U.S. Gulf Coast in September 2005. claims, as well as potential exposure to additional catastrophic activity. In addition, the ratings previously reflected both the actual and implied support of the company's parent, Southern Farm Bureau Casualty Insurance Company (SFB SFB Sonderforschungsbereich SFB Sender Freies Berlin (German Radio and TV Station) SFB Star Fleet Battles (game) SFB San Francisco Ballet SFB Society for Biomaterials SFB ScaleFactor Band ) (Ridgeland, MS). However, management is currently evaluating the potential strategic use of Property and, as a result, the inclusion of this parental support in the rating must also be evaluated. Further, in the event of additional significant losses associated with Hurricane Rita or additional events, the ratings would likely be downgraded further. The ratings will remain under review pending A.M. Best's evaluation of the company's strategic plans, as well as additional capital support from SFB. For Best's Ratings Best's rating A rating A.M. Best Co. assigns to insurance companies based on the company's ability to meet its obligations to its policyholders. , an overview of the rating process and rating methodologies, please visit www.ambest.com/ratings. A.M. Best Co., established in 1899, is the world's oldest and most authoritative insurance rating and information source. For more information, visit A.M. Best's Web site at www.ambest.com. |
|
||||||||||||||
Printer friendly
Cite/link
Email
Feedback
Reader Opinion