Citing its privately held parent company’s “lack of financial flexibility,” A.M. Best has downgraded the ratings of Wayne, Pa.-based Regis Insurance Co.

The financial strength rating was dropped to “B-“ (Fair) from “B+” (Good) and issuer credit rating moved from “bbb-” to “bb” for Regis, a subsidiary of Wilmington, Del.-based Tiber Holding Corp.

The outlook for both ratings has been revised to “negative” from “stable,” recognizing A.M. Best’s concerns that management will be challenged to achieve an efficient operating scale, “the failure of which will negatively impact the profitability of Regis and its ability to grow surplus,” it said.

Regis writes property and liability insurance in 10 states, including Delaware, Maryland and Pennsylvania, as well as the District of Columbia, according to its website.

A.M. Best said in a statement that its actions reflect the recent disclosure of the “lack of financial flexibility” at Tiber Holding Corp., due to its highly consolidated financial leverage, lack of access to additional capital and other operating issues.

The ratings also consider “Regis’ continued poor operating performance,” A.M. Best said. The ratings service noted that Regis’ weak operating results largely reflect its lack of premium scale, “thus driving ongoing underwriting losses through high expense ratios.”

Offsetting the negative rating factors, A.M. Best said, are Regis’ conservative underwriting leverage and niche market expertise in the small to mid-size commercial segment.

“While underwriting results have largely been negative, total return measures have generally been positive over a 10-year period with consideration of capital gains,” A.M. Best said in a statement. “Positive rating factors also include management’s strong underwriting culture and insistence upon proper pricing, reserving and terms and conditions.”