A.M. Best Revises Outlook to Negative for Pennsylvania’s Eastern Atlantic Insurance
A.M. Best has revised its outlook to negative from stable and affirmed the Financial Strength Rating of A- (Excellent) and the Long-Term Issuer Credit Rating of “a-” for Harrisburg, Pa.-based Eastern Atlantic Insurance Co. (EAIC).
The revised outlooks are due to the company’s inconsistent underwriting performance in recent years, which has led to a decrease in its surplus level, according to a press release issued by A.M. Best regarding the rating change.
“During 2016, the commercial auto industry experienced the highest loss ratio in 15 years,” said Bob Yeselavage, operations manager at EAIC, in an emailed statement to Insurance Journal. “Eastern Atlantic was not immune to this industry trend.”
EAIC provides commercial automobile liability, including physical damage, motor truck cargo and surety bond coverage on a direct basis.
It also reinsures a builder general liability program from one of its affiliates, Western Pacific Mutual Insurance Co., a risk retention group, and a home warranty program of Warranty Underwriters Insurance Co., also an affiliated home warranty company.
EAIC’s strategy centers on strengthening its position in its existing niche market while evaluating new business segments to determine compatibility within its business model, the A.M. Best release explained.
Management at EAIC has focused its expansion efforts on the independent owner-operator trucking market segment, operating in the short- to intermediate-haul range of up to 600 miles from its garaging location, which has proven to be a difficult market segment, according to the release.
Despite this and the repayment of a surplus note in 2013, the release notes that EAIC continues to maintain supportive risk-adjusted capitalization for its current business profile.
“Eastern Atlantic experienced adverse development in some prior years, which has not been typical for our company,” Yeselavage added. “Since this is an industry issue, it has afforded us the opportunity to both strengthen rates and focus on risk selection to better position Eastern Atlantic toward achieving profitability.”
- New York, New Jersey Governors Set 2019 Goals to Legalize Recreational Marijuana
- P/C Insurers Pulled Off Underwriting Turnaround in First 9 Months
- Former Farmers, AIG Direct, 21st Century Exec DeSantis Named President, CEO of The General
- Florida Jury Awards Family $500M in Wrongful Death Suit Over Car Shooting