AM Best has revised the outlooks of Bermuda-based reinsurer, Citadel Reinsurance Company (Citadel Re), from stable to negative.
The revised outlooks for Citadel Re follow two consecutive years of operating losses at the company.
In addition, AM Best has revised the outlooks from stable to negative and affirmed the financial strength rating (FSR) of B+ (Good) of Citadel Re’s subsidiary, American Millennium Insurance Company (AMIC).
The revised outlooks for AMIC reflect concerns regarding future underwriting performance following the company’s plans for moderate growth.
Concurrently, AM Best affirmed the FSR of B++ (Good) of Great Falls Insurance Company (Great Falls), based in Maine.
Negative rating action could occur if operating performance at Citadel Re declines further and demonstrates volatility, impacting negatively on earnings and risk-adjusted capitalisation.
AMIC’s ratings could be negatively impacted if the company’s growth results in deterioration of underwriting performance, coupled with a decrease in risk-adjusted capitalisation. A material shift in risk profile of the companies that could potentially undermine the stability and profitability of the companies also could lead to negative rating action.
AM Best, North America, Citadel Reinsurance, Bermuda, Insurance, Reinsurance, American Millennium Insurance Company, Ratings, Catastrophe