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A.M. Best Downgrades, Places Ratings of Companion Property and Casualty and Subsidiaries Under Review With Negative Implications

September 1, 2014



ENP Newswire - 01 September 2014

Release date- 29082014 - A.M. Best Downgrades, Places Ratings of Companion Property and Casualty and Subsidiaries Under Review With Negative Implications.

A.M. Best has downgraded the financial strength ratings to B++ (Good) from A (Excellent) and the issuer credit ratings to 'bbb' from 'a' and placed the ratings under review with negative implications for Companion Property and Casualty Insurance Company, and its subsidiaries, Companion Commercial Insurance Company and Companion Specialty Insurance Company (District of Columbia), collectively referred to as Companion Property and Casualty Group, which are ultimately owned by Blue Cross and Blue Shield of South Carolina (BCBSSC). All companies are domiciled in Columbia, SC, unless otherwise specified.

These rating actions follow the disclosure that BCBSSC has entered into a definitive agreement to sell Companion Property and Casualty Group to Enstar Group Limited (Enstar). The downgrade and under review with negative implications status reflects the deterioration in the group's risk-adjusted capitalization that has occurred through the second quarter of 2014, as well as the removal of rating enhancement that was afforded group members as a result of the explicit and implicit support provided by BCBSSC. Enstar and its Torus subsidiaries are assessing opportunities for policy renewals of Companion business into Torus or other non-affiliated insurers and expect to operate the orderly run-off of the historical reserves largely within its property/casualty legacy business. The ratings of BCBSSC remain unchanged as the company continues to report favorable operating and net income trends on its core health business, earnings diversification and strong risk-adjusted capital.

The ratings will remain under review until the transaction is closed.

The methodology used in determining these ratings is Best's Credit Rating Methodology, which provides a comprehensive explanation of A.M. Best's rating process and contains the different rating criteria employed in the rating process. Best's Credit Rating Methodology can be found at www.ambest.com/ratings/methodology.

A.M. Best Company is the world's oldest and most authoritative insurance rating and information source.

A.M. Best's credit ratings are independent and objective opinions, not statements of fact. A.M. Best is not an Investment Advisor, does not offer investment advice of any kind, nor does the company or its Ratings Analysts offer any form of structuring or financial advice. A.M. Best's credit opinions are not recommendations to buy, sell or hold securities, or to make any other investment decisions. View our entire notice for complete details.

A.M. Best receives compensation for interactive rating services provided to organizations that it rates. A.M. Best may also receive compensation from rated entities for non-rating related services or products offered by A.M. Best. A.M. Best does not offer consulting or advisory services. For more information regarding A.M. Best's rating process, including handling of confidential (non-public) information, independence, and avoidance of conflicts of interest, please read the A.M. Best Code of Conduct.

A.M. Best - Europe Rating Services Limited (AMBERS), a subsidiary of A.M. Best Company, is an External Credit Assessment Institutions (ECAI) in the European Union (EU). Therefore, credit ratings issued by AMBERS may be used for regulatory purposes in the EU as per Directive 2006/48/EC.


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Source: ENP Newswire


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