Allstate’s Florida-focused Castle Key Group – and its members – has had its B+ Financial Strength Rating (FSR) and Long-Term Issuer Credit Rating of bbb- placed under review with negative implications by AM Best.
According to the announcement, this decision was made following a material deterioration in the firm’s surplus position as a result of challenging personal property insurance conditions in Florida.
These challenging conditions include higher loss severity, catastrophe-related losses and the increased cost of reinsurance.
The rating agency noted that Castle Key management has taken significant corrective underwriting actions and is actively engaged in discussions with state regulators on appropriate capitalization levels.
It also highlighted that given the uncertainty regarding the placement of its 2023 reinsurance program and future capital position, the ratings will remain under review until AM Best can fully analyse the impact of these actions.
Castle Key Group’s members who are also impacted by this decision include Castle Key Insurance Company, Castle Key Indemnity Company, Encompass Floridian Insurance Company, and Encompass Floridian Indemnity Company.
