AM Best Puts Credit Ratings of Casualty Underwriters in Utah Under Review *Centurion Insurance AFS*

AM Best placed under review with negative implications the Financial Strength Rating of C++ (Marginal) and the Long-Term Issuer Credit Rating of “b” (Marginal) of Casualty Underwriters Insurance Co. in Salt Lake City, Utah.

The ratings have been placed under review with negative implications due to deterioration in CUIC’s overall level of risk-adjusted capitalization, as well as its rising leverage measures and continued erosion in policyholders’ surplus. Key balance sheet strength metrics have weakened primarily due to CUIC significantly expanding its business and overall risk exposure in new states such as Oklahoma, Kansas, North Dakota and Idaho over the past few years and particularly through 2023, according to AM Best.

In response, management intends to execute one or more capital management strategies aimed at reducing CUIC’s share of the risk exposure and strengthening its capital position. AM Best expects the actions could potentially improve the current leverage position, however the ratings will remain under review until the impact of the initiatives on the company’s rating fundamentals can be analyzed. Failure to execute or pursue these strategies as anticipated could lead to rating downgrades, according to AM Best.

Topics
Underwriting
AM Best
Casualty