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

OLDWICK, N.J.–(BUSINESS WIRE)–#insuranceAM Best has removed from under review with negative implications and affirmed the Financial Strength Rating (FSR) of B++ (Good) and the Long-Term Issuer Credit Rating (Long-Term ICR) of “bbb+” (Good) of Aegis Security Insurance Company (Aegis) (Harrisburg, PA). The outlook assigned to the FSR is stable, while the outlook assigned to the Long-Term ICR is negative.

The Credit Ratings (ratings) reflect Aegis’ balance sheet strength, which AM Best assesses as very strong, as well as its adequate operating performance, limited business profile and marginal enterprise risk management.

The negative outlook assigned to the Long-Term ICR reflects Aegis’ overall risk-adjusted capitalization at the lower end of the very strong assessment, elevated underwriting leverage ratios and adverse reserve development. The ratings were placed under review initially due to AM Best’s concerns regarding prospective balance sheet strength and shifting premium volumes. Most recently, overall balance sheet metrics somewhat improved through June 30, 2022, as Aegis sold its wholly owned subsidiary, American Sentinel Insurance Company. As a result, policyholder surplus increased and a decline in premium volume resulted in lower underwriting leverage ratios. Despite this improvement, the company’s overall risk-adjusted capitalization remains somewhat challenged relative to the current assessment, and underwriting leverage ratios remain well above the personal property composite. In addition, adverse reserve development mainly on the commercial auto and homeowners lines of business has resulted in reported accident-year deficiencies for two consecutive years, with this trend continuing through the first half of 2022. Management has developed a plan to improve balance sheet metrics and lower underwriting leverage ratios, which includes non-renewing a sizable book of property business that will begin on Nov. 1, 2022. If management fails to execute this business plan and overall risk-adjusted capitalization does not improve along with a corresponding reduction in underwriting leverage measures and improved reserve development it could result in a downgrade of the company’s Long-Term ICR. The stable outlook assigned to the FSR reflects the company’s current balance sheet assessment and adequate operating performance.

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

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