OLDWICK, N.J.–(BUSINESS WIRE)–AM Greatest has downgraded the Monetary Energy Ranking to C+ (Marginal) from B- (Honest) and the Lengthy-Time period Issuer Credit score Ranking to “b-” from “bb-” of Echelon Property & Casualty Insurance coverage Firm (Echelon) (Chicago, IL). The outlook of those Credit score Rankings (scores) is unfavourable.
The scores of Echelon, mirror its stability sheet energy, which AM Greatest categorizes as very weak, in addition to its marginal working efficiency, restricted enterprise profile and acceptable enterprise threat administration .
The downgrade of the scores follows a deterioration in stability sheet energy within the third quarter of 2020 and a change in AM Greatest’s evaluation from weak to very weak. Whereas the corporate acquired a capital infusion from its guardian – Guardian Insurance coverage Group – within the second quarter of this 12 months, which favorably impacted general capitalization, working losses and a rise in non-admitted property within the third quarter of 2020 eroded policyholder surplus. Premium quantity declined because of the COVID-19 pandemic, brought on by a lower in demand within the business auto program, Echelon’s major line of enterprise. Subsequently, the corporate has stopped writing business auto in Illinois in an effort to enhance profitability. Whereas the guardian continues to assist the corporate with the aforementioned capital contribution and on-going operational assist, AM Greatest expects Echelon’s outcomes to stay risky, which can proceed to put strain on stability sheet energy.
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