OLDWICK, NJ–(BUSINESS WIRE)–AM Best affirmed the financial strength rating of B+ (good) and the long-term issuer credit rating of “bbb-” (good) of Wisconsin Reinsurance Corporation and 1st Auto & Casualty Insurance Company (1st Auto), collectively called Wisconsin Reinsurance Group (WRG) (Madison, Wisconsin). The outlook for these credit ratings (ratings) is negative. Concurrently, AM Best withdrew the ratings as the company requested to no longer participate in AM Best’s interactive ratings process.
The ratings reflect the strength of WRG’s balance sheet, which AM Best assesses as strong, as well as its marginal operating performance, limited business profile and appropriate management of business risks.
The negative rating outlook reflects AM Best’s concerns about the effectiveness of WRG’s exposure management initiatives given the recent trend in underwriting losses, which negatively impacted risk-adjusted capitalization. Due to the group’s inability to stabilize earnings, as evidenced by reported declines in surpluses in four of the past five years, risk management capabilities have been called into question.
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