KBRA Downgrades and Withdraws Rating for United Heritage Property & Casualty Company
4 Jan 2024 | New York
KBRA downgrades the insurance financial strength rating (IFSR) for United Heritage Property & Casualty Company (UHPC) from from BBB+ to BBB-, removes the Watch Downgrade status and assigns a Stable Outlook. The downgrade reflects continued poor operating results in the first nine months of 2023 which have caused surplus to decline to $7.86 million, an approximately 35% decrease from year-end 2022, as well as the anticipated significant reduction in the size and scope of the company given the group's strategic decision to significantly realign and reduce risk in the P&C business written in UHPC. These actions are expected to negatively impact the company's earnings diversification and market position. Subsequently, KBRA withdraws the IFSR at the request of the company.
Key Credit Considerations
The rating reflects UHPC's low reserve leverage, consistent investment income and strong catastrophe reinsurance program. In addition, the company benefits from long-standing agency relationships and a management team with deep local knowledge. Balancing these strengths are UHPC's unfavorable underwriting performance, declining risk based capital levels, geographic risk concentration and catastrophe exposure.
To access rating and relevant documents, click here.