KBRA cuts Conifer Holding

KBRA said it downgraded Conifer Holdings Inc.’s issuer rating to CCC from BB and Conifer Insurance Co.’s surplus notes to CCC+ from BB+. The agency also revised the outlook to negative from stable.

On Jan. 24, the agency lowered Conifer issuer rating to BB from BB+ and the notes to BB+ from BBB-.

At the company’s request, KBRA said it withdrew all its ratings.

“The downgrades reflect the further deterioration in underwriting results in the fourth quarter driven by significant amount of adverse reserve development which negatively impacted policyholder surplus levels, driving risk-based capital for both companies to fall below Michigan's minimum risk-based capital levels and subjecting both companies to capital action plans. “Year-end results fell significantly short of management projections previously provided to KBRA.

“The change in outlook from stable to negative reflects KBRA’s concerns regarding the future adequacy of policyholder surplus, the potential for further strengthening of reserves, the adverse implications of the company’s year-end risk-based capital declining below regulatory action levels, and the uncertain prospects for Conifer to continue as an ongoing operating insurance enterprise,” the agency said in a press release.

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