AM Best Removes From Under Review With Negative Implications and Affirms Credit Ratings of Centerline Insurance Company

AM Best has removed under review with negative implications and affirmed the Financial Strength Rating of B++ (Good) and the Long-Term Issuer Credit Rating of “bbb+” (Good) of Centerline Insurance Company (Centerline) (headquartered in Knoxville, TN). The outlook assigned to these Credit Ratings (ratings) is stable.

The ratings reflect Centerline’s balance sheet strength, which AM Best assesses as very strong, as well as its adequate operating performance, limited business profile and appropriate enterprise risk management.

The company will focus on growing its very profitable per-shipment cargo and trailer insurance products as it exits its third-party commercial auto liability segment. The resulting reduction in premium will enable Centerline’s capital base to support the continuing lines of business, which have lower exposures and capital requirements. This modification to the business plan results in improved Best’s Capital Adequacy Ratio (BCAR) scores due to lesser required capital for future exposures. AM Best expects underwriting profitability to reflect historical norms for the remaining lines, generating organic surplus growth to support future business requirements.

Negative rating action could occur if the company's risk-adjusted capitalization, as measured by BCAR, or surplus materially declines. Negative rating action also could occur if the company's underwriting performance or operating profitability weakens significantly. While unlikely, positive rating action could occur if underwriting and operating results outperform peers and approximate management's projections, as Centerline grows its non-affiliated writings as a fully licensed commercial insurance writer, reducing the proportion written to its parent, Watkins Associated Industries, Inc.

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. For more information, visit www.ambest.com.

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