A.M. Best May Downgrade Tower Group's Rating
October 8, 2013 - According to The Insurance Insider, A.M. Best will likely downgrade the U.S. insurance carrier Tower Group.
Yesterday, Tower said it needed to strengthen its loss reserves by $365 million, which is equivalent to 44% of Tower's asset value at the end of March. The news came two months after the insurer said it had identified a reserving shortfall and postponed its second quarter results.
The ratings agency's response is considered critical to Tower's future, as the loss of its A- rating would likely prompt customers to take their business elsewhere amid doubts over the firm's ability to pay claims.
