OLDWICK, N.J.–(BUSINESS WIRE)–AM Best has downgraded the Financial Strength Rating (FSR) to B++ (Good) from A- (Excellent) and the Long-Term Issuer Credit Rating (Long-Term ICR) to “bbb+” (Good) from “a-” (Excellent) of Architects & Engineers Insurance Company, A Risk Retention Group (AEIC) (Delaware). The outlook of the Long-Term ICR has been revised to negative from stable, while the FSR outlook is stable. Concurrently, AM Best has withdrawn the ratings as the company has requested to no longer participate in AM Best’s interactive ratings process.
The Credit Ratings (ratings) reflect AEIC’s balance sheet strength, which AM Best assesses as very strong, as well as its adequate operating performance, limited business profile and appropriate enterprise risk management.
The rating downgrades reflect a change in AM Best’s assessment of AEIC’s operating performance as the company discontinued writing new business effective March 31, 2021. AM Best expects AEIC’s policyholder obligations to run off over the period through 2022, since the majority of the book of business consisted of multi-year policies. The negative outlook of the Long-Term ICR reflects uncertainty surrounding AEIC’s balance sheet strength as it executes its run-off strategy. In the near term, AM Best expects AEIC’s balance sheet strength to remain very strong and supported by risk-adjusted capitalization at the strongest level, as measured by Best Capital Adequacy Ratio (BCAR), with liquidity and cash flows sufficient to meet its policyholder obligations.
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