Safeway Property Downgraded

A.M. Best Co. downgraded the financial strength rating to “B” (fair) from “B++” (very good) of Safeway Property Ins. Co., based in Gainesville, Fla. The outlook is negative. The downgrade recognizes the company’s reduced capitalization as a result of its ultimate net exposure from Hurricane Charley. Due to expected losses, Safeway Property’s capitalization declined by approximately 25 percent. Best also remains concerned with the company’s significant premium growth in recent years and the elevated catastrophe exposure in the hurricane-prone Florida market. While operating performance has historically been favorable, the rating outlook is negative based on the company’s fair capitalization and the continued high gross catastrophe exposure.