OLDWICK, N.J., July 07, 2022–(BUSINESS WIRE)–AM Best has placed under review with negative implications the Financial Strength Rating of A- (Excellent) and the Long-Term Issuer Credit Ratings of “a-” (Excellent) of Topa Insurance Company (Calabasas, CA) and its subsidiary, Dorchester Insurance Company, Ltd. (U.S. Virgin Islands). These companies, which collectively are referred to as Topa Insurance Group (Topa), are wholly owned subsidiaries of Topa Equities, Ltd.
The Credit Rating (rating) actions reflect the need for AM Best to have further discussions with company management regarding strategic business initiatives to improve operating performance over the near term. AM Best will review the group’s progress on strategic initiatives, as well as the financial and operational impacts of these initiatives on the group’s operating results. The under review with negative implications status reflects a level of execution risk within the strategic initiatives as management seeks to improve results going forward following deteriorated underwriting results in 2021 and in the first quarter of 2022. In 2021, Topa’s underwriting performance was impacted by further adverse reserve development in the commercial auto liability line, including the group’s bus program in run-off, as well as increased loss severity and a lack of