A.M. Best Co. has downgraded the financial strength rating to B+ (Good) from B++ (Good) and issuer credit ratings to “bbb-” from “bbb” of Interstate Bankers Casualty Company of Chicago, Ill. The rating outlook has been revised to negative from stable.
Best said the rating actions reflect Interstate Bankers significant growth in premium volume in 2009, which followed rapid premium growth in 2007 and 2008, primarily resulting from additional premium in personal auto liability, a line of business Interstate Bankers began writing in late 2007.
This has resulted in highly elevated premium and underwriting leverage ratios.
Consequently, Interstate Bankers risk adjusted capitalization has deteriorated to a level which no longer supports its previous rating, according to Best.
The negative rating outlook reflects the possibility of further rating actions should there be continued deterioration in underwriting leverage and risk adjusted capitalization.
Source: A.M. Best, www.ambest.com/ratings.
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