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A.M. Best Revises Outlook to Negative for SeaBright Insurance Company and SeaBright Holdings, Inc.

^{Published on 2011-08-19 11:06:40 - Market Wire}
 

OLDWICK, N.J.--([ BUSINESS WIRE ])--A.M. Best Co. has revised the outlook to negative from stable and affirmed the financial strength rating of A- (Excellent) and issuer credit rating (ICR) of aa-a of SeaBright Insurance Company (SeaBright) (Chicago, IL). Concurrently, A.M. Best has revised the outlook to negative from stable and affirmed the ICR of abbb-a of the publicly traded holding company of SeaBright, SeaBright Holdings, Inc. (SHI) (Wilmington, DE) (NYSE: SBX).

"Risk Management and the Rating Process for Insurance Companies"

These rating actions reflect the significant downturn in SeaBrighta™s operating results in 2010 and 2011, which were driven by weakened underwriting performance associated with reserve strengthening actions for accident years 2007 through 2009, primarily related to increasing medical cost trends. Additionally, SeaBright continues to face marketplace challenges associated with its geographic and coverage lines expansion, which is likely to limit any turnaround in the companya™s operating performance over the near term.

Despite the revised outlook, the affirmation of the ratings recognize SeaBrighta™s solid risk-adjusted capitalization, historically profitable operating results and the experienced management team within its niche workersa™ compensation market.

The principal methodology used in determining these ratings is [ Besta™s Credit Rating Methodology -- Global Life and Non-Life Insurance Edition ], which provides a comprehensive explanation of A.M. Besta™s rating process and highlights the different rating criteria employed. Additional key criteria utilized include: aRisk Management and the Rating Process for Insurance Companiesa; aUnderstanding BCAR for Property/Casualty Insurersa; aThe Treatment of Terrorism Risk in the Rating Evaluationa; aUnderstanding Universal BCARa; and aNatural Catastrophe Stress Test Methodology.a Methodologies can be found at [ www.ambest.com/ratings/methodology ].

Founded in 1899, A.M. Best Company is the worlda™s oldest and most authoritative insurance rating and information source. For more information, visit[ www.ambest.com ].

Copyright © 2011 by A.M. Best Company, Inc.ALL RIGHTS RESERVED.