Auto Sales Slump Leads to Outlook Downgrade for Carolina Discovery Insurance

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AM Best Financial Rating Service has announced that it has lowered the outlook for North Carolina-based Discovery Insurance Co. from stable to negative following a decline in revenues and surplus from the non-standard auto insurer.

“This decline is primarily due to deteriorating insurance results due to declining written and earned premiums due to price pressures from increased competition from entrants in the North Carolina non-standard auto insurance market,” AM Best said in a press release.

The insurer’s financial standing rating remained at “B+ Good” and the issuer’s long-term rating was confirmed at “bbb-Good”.

The global rating agency said underwriting results have been impacted by challenges in the auto market, including supply chain problems, labor shortages and higher used car prices.

“While management plans to take several pricing actions to return to profitable insurance performance, it is uncertain whether these actions will be sufficient to return Discovery to its historic operating profitability in the medium term,” noted AM Best.

Founded in 1992, Discovery is headquartered in Kinston, North Carolina, and is headquartered in the state.

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