OLDWICK, N.J.--(BUSINESS WIRE)--AM Best has placed under review with negative implications the Financial Strength Rating of A (Excellent) and the Long-Term Issuer Credit Rating of “a” (Excellent) of Golden Bear Insurance Company (Golden Bear) (Stockton, CA).
The Credit Ratings (ratings) of Golden Bear were placed under review with negative implications reflecting surplus erosion observed in 2021, which management has communicated remedial action plans in response of. Through the first nine months of 2021, the company recorded roughly $12 million in adverse loss reserve development, primarily related to casualty claims that have been impacted unfavorably by social inflation factors, as well as higher-than-expected loss activity in certain programs and geographies. The unfavorable development is the primary driver for volatility leading to an 8.2% ($6 million) decline in surplus during the year. Management has outlined plans to replenish capital losses in the near term, which are expected to strengthen the company’s risk-adjusted capitalization, as measured by Best's Capital Adequacy Ratio (BCAR), and thus overall balance sheet strength. The ratings will remain under review until management executes the intended actions, and AM Best evaluates the impact on Golden Bear.
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...
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