Content and data provided by various third parties and Fidelity - Terms of Use
Print.Print
Small font size A Larger text size A Largest text size A

AM Best Revises Issuer Credit Rating Outlook to Negative for Palmetto Surety Corporation

BY Business Wire | CORPORATE | 06/06/25 06:46 PM EDT

OLDWICK, N.J.--(BUSINESS WIRE)-- AM Best has revised the outlook to negative from stable for the Long-Term Issuer Credit Rating (Long-Term ICR) and affirmed the Financial Strength Rating (FSR) of B (Fair) and the Long-Term ICR of ?bb+? (Fair) of Palmetto Surety Corporation (Palmetto) (headquartered in Mount Pleasant, SC). The outlook of the FSR is stable.

The Credit Ratings (ratings) reflect Palmetto?s balance sheet strength, which AM Best assesses as adequate, as well as its adequate operating performance, limited business profile and appropriate enterprise risk management (ERM).

The revised Long-Term ICR outlook to negative from stable reflects the pressure on Palmetto?s overall balance sheet strength assessment, as well as risk management given the challenges related to the timely collection and reporting of its premiums and agents? balances that in 2024, resulted in a reduction in admitted assets and corresponding decline in overall surplus. Concerns related to ERM relate to management?s failure to collect its premium in a timely manner and its consequential effects on capital management.

Negative rating action could occur if there continues to be volatility of Palmetto?s risk-adjusted capitalization, as measured by Best?s Capital Adequacy Ratio (BCAR), or if the overall balance sheet strength assessment deteriorates further as a result of a continued uptick of uncollected premiums and agents? balances in the course of collection. Additionally, negative rating action could occur if the company fails to strengthen its risk management, accounting and reporting controls resulting in the continued augmentation of uncollected premiums and outstanding agents? balances in the course of collection. Management is aware of the over 90 aging of uncollected premium receivables and has been instituting better collections procedures to improve the overall non-admitted assets for the company.

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 www.ambest.com.

Copyright ? 2025 by A.M. Best Rating Services, Inc. and/or its affiliates. ALL RIGHTS RESERVED.

Source: AM Best

More Fixed Income News

All Fixed Income News

In general the bond market is volatile, and fixed income securities carry interest rate risk. (As interest rates rise, bond prices usually fall, and vice versa. This effect is usually more pronounced for longer-term securities.) Fixed income securities also carry inflation risk and credit and default risks for both issuers and counterparties. Unlike individual bonds, most bond funds do not have a maturity date, so avoiding losses caused by price volatility by holding them until maturity is not possible.

Lower-quality debt securities generally offer higher yields, but also involve greater risk of default or price changes due to potential changes in the credit quality of the issuer. Any fixed income security sold or redeemed prior to maturity may be subject to loss.

Before investing, consider the funds' investment objectives, risks, charges, and expenses. Contact Fidelity for a prospectus or, if available, a summary prospectus containing this information. Read it carefully.

© 1998 – 2014 FMR LLC.

All rights reserved.
fir_news_article