AM Best has downgraded the Financial Strength Rating to B (Fair) from A- (Excellent) and the Long-Term Issuer Credit Rating to “bb+” (Fair) from “a-” (Excellent) of Prime Insurance Company (Prime) (Chicago, IL). Concurrently, AM Best has maintained the under review with negative implications status for these Credit Ratings (ratings).

The ratings of Prime reflect its balance sheet strength, which AM Best assesses as adequate, as well as its adequate operating performance, neutral business profile and marginal enterprise risk management (ERM).

These rating actions reflect AM Best’s continuing concerns related to the adequacy of the company’s loss reserves and its decreasing risk-adjusted capitalization contributing to a lower overall balance sheet assessment. AM Best also revised the assessment of Prime’s ERM to marginal from appropriate reflecting concerns regarding the effectiveness of Prime’s reserve risk management relative to the size and complexity of this risk. The marginal assessment also contemplates the effectiveness of the company’s capital management plans and the potential regulatory implications related to lower risk-based capital levels as prescribed by the National Association of Insurance Commissioners. Management’s ability to meet these required levels is another consideration.

Prime reported $111 million adverse reserve development in 2024, representing 31% of prior year-end reserves, and an additional $29 million adverse development in 2025, representing 6% of prior year-end reserves. For the first six months of 2026, the company reported another $78 million of adverse reserve development with the potential for further adverse reserve development in the second half of 2026.

The ratings will remain under review pending the filings of Prime’s statutory financial statements for third-quarter 2026, and AM Best’s meeting with management to better assess the company’s reserves, risk-adjusted capital and any and/or all mitigation tactics available.

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.

AM Best is a global credit rating agency, news publisher and data analytics provider specializing in the insurance industry. Headquartered in the United States, the company does business in over 100 countries with regional offices in London, Amsterdam, Dubai, Hong Kong, Singapore and Mexico City. For more information, visit www.ambest.com.

Copyright © 2026 by A.M. Best Rating Services, Inc. and/or its affiliates. ALL RIGHTS RESERVED.

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