A.M. Best downgrades Primary Insurance

OLDWICK, New Jersey—Rating agency A.M. Best Co. Inc. has downgraded the financial strength rating of Dublin, Republic of Ireland based-Primary Insurance Co. Ltd.

In a statement, Best said that the downgrade reflects the deterioration in Primary's financial performance, caused partly by reserve strengthening in its commercial small to medium-sized account in 2006. Performance has also been affected by higher-than-anticipated reinsurance costs, further softening in PICL's main lines of business and high expenses caused by a reduction in the level of business written, the rating agency said.

The ratings remain under review, while Best assesses the impact of actions taken by Primary's parent company, Hamilton, Bermuda-based Primary Group Ltd. "If PGL provides additional explicit support, then PICL may be able to recover a secure rating. However, in the absence of any action from PGL, a further downgrade is likely," Best said.