A.M. Best Revises Outlook to Negative for DuraRock Reinsurance, Ltd

OLDWICK, N.J.--(BUSINESS WIRE)-- A.M. Best has revised the outlooks to negative from stable and affirmed the financial strength rating (FSR) of A (Excellent) and the issuer credit rating (ICR) of “a” of DuraRock Reinsurance, Ltd (DuraRock) (St. James, Barbados).

The revision of the outlooks reflects DuraRock’s less favorable underwriting performance in recent years as demonstrated by its 2014 combined ratio of 112%. The outlook change also reflects the planned withdrawal of third party programs that has diminished the company’s already modest business profile.

The ratings reflect DuraRock’s strong risk-adjusted capital position, very low underwriting leverage, consistently profitable operating earnings and the operating and capital support from its owner and his affiliated companies. The positive rating factors are derived from DuraRock’s conservative underwriting leverage position, solid year-to-year investment income earnings and business expertise within its niche transportation market. Offsetting these strengths is the company’s limited scope of operations, the aforementioned unfavorable underwriting results over a five-year period and above average investment leverage. The ratings could be lowered if weak underwriting performance persists.

Currently, all business is derived from Cherokee Insurance Company, (Cherokee) (Port Huron, MI), an affiliated company. Cherokee’s FSR of A (Excellent) and ICR of “a” have been affirmed with stable outlooks.

The methodology used in determining these ratings is Best’s Credit Rating Methodology, which provides a comprehensive explanation of A.M. Best’s rating process and contains the different rating criteria employed in the rating process. Best’s Credit Rating Methodology can be found at www.ambest.com/ratings/methodology.

Key insurance criteria reports utilized:

• Evaluating Country Risk
• Rating Members of Insurance Groups
• Risk Management and the Rating Process for Insurance Companies
• Understanding Universal BCAR

This press release relates to rating(s) that have been published on A.M. 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 visit A.M. Best’s Ratings & Criteria Center.

A.M. Best Company is the world's oldest and most authoritative insurance rating and information source. For more information, visit www.ambest.com.

Copyright © 2015 by A.M. Best Company, Inc. ALL RIGHTS RESERVED.

A.M. Best
Marc Liebowitz, 908-439-2200, ext. 5071
Senior Financial Analyst
[email protected]
or
Christopher Sharkey, 908-439-2200, ext. 5159
Manager, Public Relations
[email protected]
or
Gerard Altonji, 908-439-2200, ext. 5626
Assistant Vice President
[email protected]
or
Jim Peavy, 908-439-2200, ext. 5644
Assistant Vice President, Public Relations
[email protected]

Source: A.M. Best

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