Best Downgrades Three Workers’ Comp Firms

A.M. Best Co. said it downgraded three large carriers in the California workers’ compensation insurance market, which Best said “has exhibited tremendous financial volatility and greater market instability than any other property/casualty business segment.” State Compensation Insurance Fund of California was downgraded to B++ (very good) from A- (excellent) because of “continued deterioration of the fund’s operating performance and aggressive premium growth in the volatile California market.” State Fund, which holds a 25% market share, said that despite the slightly lower rating, the fund remains financially strong. Best also downgraded Zenith National Insurance Group and Argonaut Insurance Group to A (excellent) from A+ (superior). A Zenith spokesman said the company’s financial base is strong and it believes it has set aside adequate reserves to deal with any problems in the California workers’ comp market. No Argonaut officials could be reached for comment.