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A.M. Best Co. has downgraded the financial strength rating to B++ (Good) from A- (Excellent) and issuer credit rating to “bbb” from “a-” of Alabama Self-Insured Worker’s Compensation Fund (Alabama SIF) (Birmingham, AL). The outlook for both ratings has been revised to negative from stable. Concurrently, A.M. Best has withdrawn the ratings as the company has requested to no longer participate in A.M. Best’s interactive rating process.
The downgrading of the ratings for Alabama SIF reflect a decrease in its risk-adjusted capitalization over the last year, which is owed to adverse underwriting results and an adverse projected underwriting environment in Alabama. Investment results remain strong but were unable to offset these adverse underwriting results.
The methodology used in determining these ratings is Best’s Credit Rating Methodology, which provides a comprehensive explanation of A.M. Best’s rating process and contains the different rating criteria employed in the rating process. Key criteria utilized include: “Risk Management and the Rating Process for Insurance Companies” and “Understanding Universal BCAR.” Best’s Credit Rating Methodology can be found at www.ambest.com/ratings/methodology.
Founded in 1899, A.M. Best Company is the world's oldest and most authoritative insurance rating and information source. For more information, visit www.ambest.com.
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