AM Best downgraded the financial strength rating to B+ (Good) from B++ (Good) and the long-term issuer credit ratings to ‘bbb-‘ (Good) from ‘bbb’ (Good) of the members of
The ratings reflect the strength of Bankers’ balance sheet, which AM Best rates as strong, as well as its weak operating results, limited business profile and appropriate enterprise risk management (ERM).
Bankers’ downgrade reflects the continued deterioration of the surplus and ongoing challenges in reserve development. Bankers have reported a drop in surplus in four of the past five years due to increased underwriting losses. This trend continued with a further decline in the surplus in the first half of 2022. Reserves, which continue to develop unfavorably, have been affected in recent years by widespread inflationary pressures in the homeowner business. Drain lines, which were previously a cause of unfavorable development, have started to develop favorably due to years of strengthening stocks and reducing exposures given their drain condition.
The negative outlook is based on the aforementioned issues that raise concern about the efficacy of Bankers’ ERM program against current and emerging risks. Bankers provides personal property coverage in
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Source: AM Best