"Standard & Poor's believes the company will continue to be challenged in the deteriorating medical malpractice market within its primary state of business, New Jersey," said Standard & Poor's credit analyst Tom E. Thun. The prior rating on the company reflected the benefits from implied group support from the Hum Group of Co. Inc. Because of Princeton's poor performance, the benefit of implied group support has been removed. "Reserve deficiencies in its medical malpractice and workers' compensation business weighed heavily on its year-end capitalization," Thun added, "and future underwriting profitability to regain those losses remains questionable in the medium term."
Headquartered in Princeton, N.J., the company primarily underwrites medical malpractice (64% of direct premiums) and workers' compensation coverages (28%). New Jersey, Pennsylvania, and New York contribute more than 75% of total direct premium revenue.
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