AM Best Revises Outlooks to Negative for Finger Lakes Fire and Casualty Company

AM Best has revised the outlooks to negative from stable and affirmed the Financial Strength Rating of A (Excellent) and the Long-Term Issuer Credit Rating of “a” (Excellent) of Finger Lakes Fire and Casualty Company (Finger Lakes) (Trumansburg, NY).

These Credit Ratings (ratings) reflect Finger Lakes’ balance sheet strength, which AM Best assesses as very strong, as well as its adequate operating performance, neutral business profile and appropriate enterprise risk management.

The revision of the outlooks to negative reflects Finger Lakes’s prolonged negative trend in operating results, which has placed pressure on its business profile assessment. The volatility in the company’s results, which continued through the third quarter of 2023, is fueled by adverse reserve development, higher than expected jury verdicts and the severity of weather-related losses driven by inflationary pressures. The company has a long-standing presence in New York and an experienced management team. However, as a single- state writer with concentration in property lines of business, Finger Lakes is susceptible to frequent and severe weather-related losses and potentially adverse judicial, regulatory, and economic challenges.

Finger Lakes’s management is addressing the underwriting volatility through rate increases, re-underwriting of its book of business, inflation guard adjustments, non-renewing unprofitable accounts and in-depth loss control inspections. AM Best expects that these actions will take time to reverse the negative trends and for the metrics to return to its historical norms. In the absence of demonstrated improvement, the ratings could be downgraded.

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.

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