OLDWICK, N.J.--()--AM Best has removed under review with negative implications and affirmed the Financial Strength Rating of B++ (Good) and the Long-Term Issuer Credit Rating of “bbb+” (Good) of Centerline Insurance Company (Centerline) (headquartered in Knoxville, TN). The outlook assigned to these Credit Ratings (ratings) is stable.

The ratings reflect Centerline’s balance sheet strength, which AM Best assesses as very strong, as well as its adequate operating performance, limited business profile and appropriate enterprise risk management.

The company will focus on growing its very profitable per-shipment cargo and trailer insurance products as it exits its third-party commercial auto liability segment. The resulting reduction in premium will enable Centerline’s capital base to support the continuing lines of business, which have lower exposures and capital requirements. This modification to the business plan results in improved Best’s Capital Adequacy Ratio (BCAR) scores due to lesser required capital for future exposures. AM Best expects underwriting profitability to reflect historical norms for the remaining lines, generating organic surplus growth to support future business requirements.

Negative rating action could occur if the company's risk-adjusted capitalization, as measured by BCAR, or surplus materially declines. Negative rating action also could occur if the company's underwriting performance or operating profitability weakens significantly. While unlikely, positive rating action could occur if underwriting and operating results outperform peers and approximate management's projections, as Centerline grows its non-affiliated writings as a fully licensed commercial insurance writer, reducing the proportion written to its parent, Watkins Associated Industries, Inc.

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