AM Best Downgrades Credit Ratings of Kentucky Growers Insurance Company
25 June 2024 - 6:52PM
Business Wire
AM Best has downgraded the Financial Strength Rating to
B++ (Good) from A- (Excellent) and the Long-Term Issuer Credit
Rating to “bbb+” (Good) from “a-” (Excellent) of Kentucky Growers
Insurance Company (Kentucky Growers) (Lexington, KY). The outlook
of these Credit Ratings (ratings) has been revised to stable from
negative.
The ratings reflect Kentucky Growers’ balance sheet strength,
which AM Best assesses as very strong, as well as its marginal
operating performance, limited business profile and appropriate
enterprise risk management (ERM).
The ratings downgrades reflect the change in the company’s
operating performance assessment to marginal from adequate,
following continued volatility in underwriting and operating
results in recent years due primarily to severe weather-related
events. The company experienced major catastrophe events in 2022
and 2023, which resulted in elevated underwriting losses that drove
deterioration in key profitability ratios, ultimately aligning its
operating performance with the marginal assessment. Despite this
volatility, efforts have been made related to exposure management
and re-underwriting, coupled with sizable rate changes, which are
expected to stabilize underwriting and operating results over time.
Kentucky Growers also has a geographic concentration of risk, which
leaves it susceptible to adverse weather conditions, and has
greatly contributed to the volatile underwriting and operating
performance in recent years.
Kentucky Growers’ balance sheet strength is supported by its
strongest level of risk-adjusted capitalization, as measured by
Best’s Capital Adequacy Ratio (BCAR), and conservative underwriting
and loss reserve leverage measures. The business profile assessment
reflects the company’s concentration of personal property business
in a state prone to severe convective storms. The company’s ERM
remains appropriate and in line with its risk profile, with
strategies focused on identification, monitoring and control of
risk exposures in Kentucky.
This press release relates to Credit Ratings that have been
published on AM 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 see AM Best’s Recent Rating
Activity web page. For additional information regarding the use and
limitations of Credit Rating opinions, please view Guide to Best's
Credit Ratings. For information on the proper use of Best’s Credit
Ratings, Best’s Performance Assessments, Best’s Preliminary Credit
Assessments and AM Best press releases, please view Guide to Proper
Use of Best’s Ratings & Assessments.
AM Best is a global credit rating agency, news publisher and
data analytics provider specializing in the insurance industry.
Headquartered in the United States, the company does business in
over 100 countries with regional offices in London, Amsterdam,
Dubai, Hong Kong, Singapore and Mexico City. For more information,
visit www.ambest.com.
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Phinthip Dezuzio Senior Financial Analyst +1
908 882 1736 phinthip.dezuzio@ambest.com
Christopher Sharkey Associate Director, Public
Relations +1 908 882 2310
christopher.sharkey@ambest.com
Kenneth Tappen Senior Financial Analyst +1 908
882 2389 kenneth.tappen@ambest.com
Al Slavin Senior Public Relations Specialist +1
908 882 2318 al.slavin@ambest.com