OLDWICK, N.J.--(BUSINESS WIRE)--
A.M. Best has placed under review with negative implications the Financial Strength Rating (FSR) of B++ (Good) and the Long-Term Issuer Credit Rating (Long-Term ICR) of “bbb” of Conifer Insurance Company (Conifer); the FSR of B+ (Good) and the Long-Term ICR of “bbb-” of Conifer’s affiliate, White Pine Insurance Company (White Pine); and the Long-Term ICR of “bb” of its parent holding company, Conifer Holdings, Inc. (CHI) [NASDAQ: CNFR]. All are domiciled in Birmingham, MI.
These Credit Rating (rating) actions reflect the continued adverse loss reserve development reported by Conifer through 2017, the prevailing challenges associated with this continued adverse development, and the earnings and capital strain placed on CHI and its subsidiaries as a result. The under review status considers a host of strategic initiatives and corrective actions that management plans to execute sometime in the third quarter of 2017. Upon execution, these actions could alleviate many of A.M. Best’s concerns, and place CHI and its subsidiaries on more solid financial footing. If these initiatives fail to get executed, the ratings are likely to be downgraded, hence the negative implications.
After significant improvement in operating profitability in 2015, Conifer had a setback in 2016 due to adverse reserve development primarily in its commercial auto and commercial multi-peril lines. Through the second quarter of 2017, reserves continue to develop adversely despite much needed reserve strengthening in 2016. Management is optimistic that operating results will improve in the medium term as the company gains economies of scale and grows into its infrastructure, and as management looks to regain its position as a focused niche commercial specialty insurer.
The ratings will remain under review pending the execution of these new initiatives and discussions with management. Timely and satisfactory execution of these initiatives and continuing to meet its financial plan would likely lead to an affirmation of all of the respective current ratings. Inability to execute or material deviations from the plan would likely result in negative rating pressure.
This press release relates to Credit Ratings that have been published on A.M. 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 A.M. Best’s Recent Rating Activity web page. For additional information regarding the use and limitations of Credit Rating opinions, please view Understanding Best’s Credit Ratings. For information on the proper media use of Best’s Credit Ratings and A.M. Best press releases, please view Guide for Media - Proper Use of Best’s Credit Ratings and A.M. Best Rating Action Press Releases.
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