A.M. Best Revises Outlook to Negative for Standard Casualty Company

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 of “a-” of Standard Casualty Company (Standard Casualty) (New Braunfels, TX). Standard Casualty is a subsidiary of Palm Harbor Homes, Inc. (Palm Harbor) (Addison, TX) [NASDAQ: PHHM], a manufacturer and marketer of factory built homes.

The revised outlook is based on the deterioration in the financial performance and capital position of Standard Casualty’s parent, due to future uncertainty in Palm Harbor’s credit facility and liquidity requirements, which may result in a potential burden on the insurance operations.

The ratings reflect Standard Casualty’s solid risk-adjusted capitalization despite dividend payments, which have occurred to supplement its parent company’s operations and financial issues that remain at Palm Harbor. In addition, the ratings contemplate Standard Casualty’s local market knowledge and profitable operating performance, which has consistently outperformed the industry composite averages.

These positive rating factors are somewhat offset by Standard Casualty’s elevated underwriting expense ratio, geographic concentration of risk and limited product offerings. As a property writer in a limited number of states, the company’s operating performance remains susceptible to regulatory issues, highly competitive market conditions and weather-related events.

For Best’s Credit Ratings, an overview of the rating process and rating methodologies, please visit www.ambest.com/ratings.

The principal methodologies used in determining these ratings, including any additional methodologies and factors that may have been considered, can be found at www.ambest.com/ratings/methodology.

Founded in 1899, A.M. Best Company is a global full-service credit rating organization dedicated to serving the financial and health care service industries, including insurance companies, banks, hospitals and health care system providers. For more information, visit www.ambest.com.

A.M. Best Co.
Analysts:
Michael T. Venezia, (908) 439-2200, ext. 5034
michael.venezia@ambest.com
or
Jeffrey Mango, CPA, (908) 439-2200, ext. 5204
jeffrey.mango@ambest.com
or
Public Relations:
Jim Peavy, (908) 439-2200, ext. 5644
james.peavy@ambest.com
or
Rachelle Morrow (908) 439-2200, ext. 5378
rachelle.morrow@ambest.com