A.M. Best Downgrades Ratings of IFA Insurance Company

OLDWICK, N.J.--(BUSINESS WIRE)-- A.M. Best Co. has downgraded the financial strength rating to B+ (Good) from B++ (Good) and issuer credit rating to “bbb-” from “bbb” of IFA Insurance Company (IFA) (Clark, NJ). The outlook for both ratings is negative.

The downgrade of the ratings reflects IFA’s unprofitable operating performance in recent years, as a result of the adverse trends in personal injury protection and bodily injury loss experience in the New Jersey personal automobile market leading to significant overall underwriting loss. As a result, a downward trend in risk-adjusted capitalization has occurred in recent years, in conjunction with elevated underwriting leverage ratios. Although the company continues to refine its underwriting criteria and implement rate increases in response to market trends and conditions and diversify into other markets, uncertainty exists regarding the company’s ability to improve underwriting performance, given the difficult operating environment of the New Jersey automobile market. As a result, the negative outlook indicates that a further downward rating action may occur in future periods if the company’s underwriting results continue to deteriorate, in conjunction with a corresponding loss of risk-adjusted capitalization.

The principal methodology used in determining these ratings is Best’s Credit Rating Methodology -- Global Life and Non-Life Insurance Edition, which provides a comprehensive explanation of A.M. Best’s rating process and highlights the different rating criteria employed. Additional key criteria utilized include: “Risk Management and the Rating Process for Insurance Companies” and “Understanding BCAR for Property/Casualty Insurers.” Methodologies can be found at www.ambest.com/ratings/methodology.

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A.M. BestRaymond Thomson, ARM, 908-439-2200, ext. 5621Senior Financial Analyst[email protected]orRachelle Morrow, 908-439-2200, ext. 5378Senior Manager, Public Relations[email protected]orJeffrey Mango, CPA, 908-439-2200, ext. 5204Assistant Vice President[email protected]orJim Peavy, 908-439-2200, ext. 5644Assistant Vice President, Public Relations[email protected]

Source: A.M. Best Co.