AM Best has downgraded the Financial Strength Rating (FSR) to C (Weak) from C+ (Marginal) and the Long-Term Issuer Credit Rating (Long-Term ICR) to “ccc” from “b-” of Echelon Property & Casualty Insurance Company (Echelon) (Chicago, IL). The outlook of the Credit Ratings (ratings) is negative. Concurrently, AM Best has withdrawn the ratings as the company has requested to no longer participate in the interactive rating process.
The ratings of Echelon reflect its balance sheet strength, which AM Best categorizes as very weak, as well as its marginal operating performance, limited business profile and marginal enterprise risk management (ERM).
The downgrade of the ratings is the result of the removal of one notch of lift previously afforded to Echelon as a wholly owned subsidiary of Guardian Insurance Company, Inc. (Guardian). The rating action follows the sale of all outstanding shares of Echelon’s stock to Lockhart Companies, Inc, Guardian’s ultimate parent, in December 2020. In addition, Echelon’s ERM assessment was revised to marginal from appropriate since the company no longer benefits from Guardian’s ERM program.
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 media use of Best’s Credit Ratings and AM Best press releases, please view Guide for Media – Proper Use of Best’s Credit Ratings and AM Best Rating Action Press Releases.
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