AM Best Withdraws Credit Ratings of New York Schools Insurance Reciprocal

AUGUST 23, 2024 01:13 PM (EDT)

AM Best Withdraws Credit Ratings of New York Schools Insurance Reciprocal

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FOR IMMEDIATE RELEASE

OLDWICK - AUGUST 23, 2024 01:13 PM (EDT)
AM Best has downgraded the Financial Strength Rating to C++ (Marginal) from B (Fair) and the Long-Term Issuer Credit Rating to "b" (Marginal) from "bb" (Fair) of New York Schools Insurance Reciprocal (NYSIR) (Uniondale, NY). The outlook of these Credit Ratings (ratings) is negative. Concurrently, AM Best has withdrawn these ratings at the request of the company to no longer participate in AM Best's interactive rating process. This serves as AM Best's final rating update.

The ratings reflect NYSIR's balance sheet strength, which AM Best assesses as weak, as well as its marginal operating performance, limited business profile and marginal enterprise risk management.

NYSIR's overall balance sheet strength assessment has been revised to weak from adequate. The downgrading of the ratings reflects the company's deterioration in risk-adjusted capitalization, as measured by Best's Capital Adequacy Ratio (BCAR), and balance sheet metrics, driven by the reported net loss as of second- quarter 2024. The company's balance sheet has been impacted in recent years primarily from higher-than-anticipated loss emergence on prior accident years, as well as storm-related property losses. In addition, NYSIR has experienced unfavorable loss emergence driven by adverse external factors impacting the general liability environment, most notably the Child Victims Act, as well as the impact of social inflation on liability claims costs.

The negative outlook reflects the adverse trend in NYSIR's overall balance sheet strength and operating results over the last several years, which has resulted in significant decrease in surplus and risk-adjusted capitalization.

This press release relates to Credit Ratings that have been published on AM Best's website. For all rating information relating to the release and pertinent disclosures, including details of the office responsible for issuing each of the individual ratings referenced in this release, please see AM Best's Recent Rating Activity web page. For additional information regarding the use and limitations of Credit Rating opinions, please view Guide to Best's Credit Ratings. For information on the proper use of Best's Credit Ratings, Best's Performance Assessments, Best's Preliminary Credit Assessments and AM Best press releases, please view Guide to Proper Use of Best's Ratings & Assessments.

AM Best is a global credit rating agency, news publisher and data analytics provider specializing in the insurance industry. Headquartered in the United States, the company does business in over 100 countries with regional offices in London, Amsterdam, Dubai, Hong Kong, Singapore and Mexico City.