S&P analyst Karole Dill Barkley told National Underwriter, "It's still a very strong franchise. We see the strength of the company as being consistent with that of prior years. While this is a niche business, the company has actually done fairly well through a very difficult market environment."

But on the down side, she noted, the company has been subject to continued negative trends in loss activity. "As we look at the sector that it's in, there is an increase in severity trends?which is also seen in other liability lines. There is just an increased vulnerability there."

The main message from S&P, Ms. Barkley said, is that "we still think it's a very strong company. ?Double-A-minus' is still a very strong rating. We just think there is an added risk factor from the increase in severity trends relative to the size of the company."

Ms. Barkley also expressed her concern that ALAS remains highly dependent on reinsurance. "The reinsurers have continued to support the company well, but this dependency is another risk factor."

She noted that S&P's concerns were more reflective of "macro issues" that the insurer was dealing with, rather than micro issues related specifically to the company.

Based in Bermuda, ALAS offers attorneys' liability insurance. The company reported $265 million for gross premiums last year, with $117 million in net premiums.