AM Best Downgrades and Withdraws Credit Ratings of Conifer Holdings, Inc. and Subsidiaries

AM Best has downgraded the Financial Strength Rating to C (Weak) from B+ (Good) and the Long-Term Issuer Credit Ratings (Long-Term ICR) to “ccc” (Weak) from “bbb-” (Good) of Conifer Insurance Company (CIC) and White Pine Insurance Company (White Pine), subsidiaries of Conifer Holdings, Inc. (CHI) [NASDAQ: CNFR], a publicly traded property/casualty insurance holding company. Additionally, AM Best has downgraded the Long-Term ICR to “c” (Poor) from “bb-” (Fair) of CHI. Concurrently, AM Best has placed all of these Credit Ratings (ratings) under review with negative implications. At the same time, AM Best has withdrawn all of these ratings as the company has requested to no longer participate in AM Best’s interactive rating process. All companies are domiciled in Troy, MI. and collectively referred to as Conifer Insurance Group (Conifer).

The ratings reflect Conifer’s balance sheet strength, which AM Best assesses as very weak, as well as its marginal operating performance, limited business profile and weak enterprise risk management (ERM).

The rating actions take into consideration the significant reserve charge taken in the fourth quarter of 2023 and the direct impact this had on the group’s reported surplus, resulting in a revision of Conifer’s balance sheet strength assessment to very weak. The balance sheet strength assessment not only takes in consideration the sudden and material deterioration in reserves and risk-adjusted capitalization, as measured by Best’s Capital Adequacy Ratio (BCAR), but it also considers the regulatory action levels brought on by the group’s failure to meet Michigan’s minimum risk-based capital levels.

Both CIC and White Pine are in the process of submitting formal plans to the state regulator, which has altered AM Best’s assessment of the group’s business profile, now considered to be limited due to the regulatory oversight and future actions to be taken by management. The ratings already reflect the group’s marginal operating performance given the results to date, which have consistently fallen outside of expectations. A reduction in Conifer’s ERM assessment to weak reflects AM Best’s ongoing concern related to the group’s execution, reserving, capital preservation and general risk management practices leading up to this rating action.

Conifer’s ratings were placed under review with negative implications prior to being withdrawn, pending the receipt of a formal business plan as well as other steps and initiatives contemplated by management to improve risk-adjusted capitalization and get both companies back to regulatory compliance levels.

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.

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