By Navneeta Nandan
July 18 - (The Insurer) - AM Best has revised Southern Vanguard Insurance Company's outlook to negative from stable, reflecting pressure on its operating performance driven by increased frequency and severity of weather-related loss events.
Southern Vanguard's geographic concentration of risk exposes it to adverse weather conditions and has caused volatility in underwriting results in recent years, AM Best said.
The rating agency acknowledged the company's initiatives to improve and stabilise its underwriting and operating performance but said it remains uncertain of their effectiveness. It added that it may take further negative rating actions if unfavourable trends continue.
AM Best affirmed Southern Vanguard's financial strength rating of A-minus and its long-term issuer credit rating of a-minus, reflecting the insurer's balance sheet strength, which it assessed as very strong, along with its adequate operating performance, limited business profile and appropriate enterprise risk management.