Florida’s Argus Insurance Downgraded by A.M. Best
A.M. Best Co. has downgraded the financial strength rating to D (Poor) from C- (Weak) and issuer credit rating to “c”
from “ccc-” of Argus Fire & Casualty Insurance Co. of North Miami Beach, Fla. A.M. Best’s outlook for both ratings is negative.
A.M. Best said these rating actions reflect Argus’ elevated underwriting leverage, considerable exposure growth and significant catastrophe exposure as a personal property writer in Florida.
In addition, the company relies substantially on the Florida Hurricane Catastrophe Fund (FHCF) for its catastrophe reinsurance program. Due to the contingent capital nature of the FHCF and its recently revised projected claims paying capacity, A.M. Best said it remains concerned regarding FHCF’s ability to fund all obligations associated with a severe hurricane.
A.M. Best further cited Argus’ significant premium growth in recent years, accelerated by the company’s assumption of policies from Citizens Property Insurance Corp. that A.M. Best said has put additional stress on the company’s risk-adjusted capital position. As a result, these rating actions are reflective of Argus’ deteriorated risk-adjusted capital position.
These negative attributes are slightly offset by the company’s conservative investment profile and management’s knowledge of the Florida homeowners’ market, according to the rating analysts. A.M. Best said the ratings acknowledge the potential financial flexibility of Argus’s ultimate parent, United Automobile Insurance Group.
Argus is an admitted, Florida domiciled property/asualty insurance company writing business through indeoendent agents. Argus is a stock company wholly owned by United Automobile Insurance Group. Argus is affiliated with National Insurance Management Co., which oversees the day-to-day administrative duties and claims responsibilities for Argus.