AM Best has placed under review with negative implications the Financial Strength Rating (FSR) of A (Excellent) and the Long-Term Issuer Credit Ratings (Long-Term ICR) of “a” (Excellent) of the members of Oxford Insurance Companies (Oxford). See below for a detailed listing of members and Credit Ratings (ratings).

Oxford was placed under review with negative implications based on the recent change in Oxford’s business mix and limits profile, as the company has deviated from its original business profile and has become an insurer of large, financial guarantee/judgment preservation policies, which is a highly specialized, niche line of business involving multiyear policies and high limits exposure. These high coverage limits could expose the organization to higher-than-expected loss outcomes and probable maximum loss estimates that could be viewed as excessive when considering the tail risk related to these coverages and the size of the aggregate risk pool.

Lastly, this action includes an assessment of Oxford’s risk management practices related to these risks and the need to understand management’s level of risk awareness, sophistication and risk mitigation tactics relative to these products more comprehensively. Management states they have reduced the limits offered on this business as they contemplate the efficacy and appropriate governance vis-à-vis Oxford’s aggregate risk pool, but the existing policies have multiple years remaining. Management has also stated their intent to pursue other alternatives, including reinsurance, to mitigate against potentially higher-than-expected loss outcomes.

The ratings will remain under review pending AM Best's full analysis and assessment of standard and stress scenario capability of Oxford's risk pool to support the new product and of its governance in managing risk appetite and tolerance within the company's enterprise risk management framework.

The FSR of A (Excellent) and the Long-Term ICRs of “a” (Excellent) have been placed under review with negative implications for the members of Oxford Insurance Companies:

• Oxford Insurance Company LLC
• Oxford Insurance Company TN LLC
• Oxford Insurance Company NC LLC
• Oxford Insurance Company MT LLC
• First Community Bankers Insurance Company, LLC

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 use of Best’s Credit Ratings, Best’s Performance Assessments, Best’s Preliminary Credit Assessments and AM Best press releases, please view Guide to Proper Use of Best’s Ratings & Assessments.

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