OLDWICK, N.J.--(BUSINESS WIRE)--AM Best has revised the outlooks to stable from positive and affirmed the Financial Strength Rating of B (Fair) and the Long-Term Issuer Credit Rating of “bb+” (Fair) of Greenville Casualty Insurance Company (Greenville Casualty) (Greer, SC).
The Credit Ratings (ratings) reflect Greenville Casualty’s balance sheet strength, which AM Best assesses as adequate, as well as its marginal operating performance, limited business profile and marginal enterprise risk management.
The revised outlooks to stable from positive reflect the substantial deterioration in Greenville Casualty’s underwriting and operating performance in 2021, which resulted in a moderate decline in policyholders’ surplus. These results fell significantly short of management’s financial projections. The deterioration in the company’s underwriting results was driven by a sharp decline in net premiums written due to the runoff of Greenville Casualty’s existing South Carolina private passenger non-standard auto program and a delay in the implementation of its new ISO-based program. The deterioration in underwriting results also was driven by the settlement of two bad faith claims.
The rating affirmations were based on Greenville Casualty’s strongest level of risk-adjusted capitalization, as measured by Best’s Capital Adequacy Ratio (BCAR), and modest underwriting leverage, which were derived from modest growth in policyholders’ surplus and reduced premium writings over the most recent five-year period. Management anticipates that premiums will rebound with its new South Carolina auto program, and improved claims results due to initiatives implemented by the company.
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