AM Best Removes California Gold Bear From Under Review, Confirms Credit Ratings
AM Best was removed from review with negative implications and affirmed Financial Strength Rating (FSR) of A (Excellent) and Issuer Long Term Credit Rating (Long Term ICR) of “a ” (Excellent) of Golden Bear Insurance Co. headquartered in Stockton, California.
The outlook attributed to the ratings is stable.
Golden Bear’s ratings were placed under review with negative implications last year.
AM Best said the ratings reflect Golden Bear’s balance sheet strength, which it rates as very strong, as well as its strong operational performance, neutral business profile and appropriate management of business risks.
The ratings were removed from review with negative implications following the successful execution of capital initiatives communicated in response to the erosion of surpluses recorded in 2021.
“A significant development in negative loss reserves was reported in 2021, leading to erosion, primarily related to claims which were impacted by social inflation, higher than expected loss activity and challenging legal environments. in certain geographies,” AM Best said. “In response, management has bolstered reserves and enforced stricter underwriting guidelines to curb future development.”
Golden Bear also issued a $15 million surplus note and received an $8 million cash contribution from holding company, Hall Holdings Inc., in the second quarter to increase the company’s surplus position to more. of $100 million. In the meantime, a $10 million line of credit was issued, which has since been settled using proceeds from the holding company. These actions have brought the company’s risk-adjusted capitalization to a very high level compared to the level declared by the company before it was placed under review, according to AM Best.
California AM Best
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