A.M. Best Affirms Ratings of United Fire Group, Inc. and Its Subsidiaries
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At the same time,
The ratings of
These positive rating factors are partially offset by the variability in United Fire’s underwriting and operating results in recent years, driven by adverse loss reserve development from Hurricane Katrina-related claims (in 2008 and 2009) and catastrophe and weather-related losses (in 2008 and 2011), the continuing challenging conditions in the organization’s key target markets and execution risk associated with the integration of Mercer into its operations.
The rating of UFG recognizes the capital strength of its insurance subsidiaries, its modest financial leverage and adequate interest coverage measures.
While
The ratings of United Life acknowledge its adequate level of risk-adjusted capitalization, consistently positive operating results and improved growth trends in life insurance premiums. The ratings also recognize the five-year growth in capital, despite paying
These positive rating factors are partially offset by United Life’s continued exposure to interest rate volatility as a majority of its product reserves are still concentrated in interest-sensitive annuity and life products.
The FSR of A (Excellent) and ICRs of “a” have been affirmed for
Lafayette Insurance Company Addison Insurance Company United Fire & Indemnity Company - United Fire Lloyds
Mercer Insurance Company Financial Pacific Insurance Company Mercer Insurance Company of New Jersey, Inc. Franklin Insurance Company
The methodology used in determining these ratings is Best’s Credit Rating Methodology, which provides a comprehensive explanation of A.M. Best’s rating process and contains the different rating criteria employed in the rating process. Key criteria utilized include: “Catastrophe Analysis in A.M. Best Ratings”; “Equity Credit for Hybrid Securities”; “Insurance Holding Company and Debt Ratings”; “The Treatment of Terrorism Risk in the Rating Evaluation”; “Risk Management and the Rating Process for Insurance Companies”; “Understanding BCAR for Property/Casualty Insurers”; and “Rating Members of Insurance Groups.” Best’s Credit Rating Methodology can be found at www.ambest.com/ratings/methodology.
Founded in 1899,
Copyright © 2012 by A.M. Best Company, Inc.ALL RIGHTS RESERVED.
Financial Analyst
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<person>Michael Lagomarsino, CFA
Assistant Vice President
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Senior Manager, Public Relations
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Assistant Vice President, Public Relations
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Copyright: | Copyright Business Wire 2012 |
Wordcount: | 747 |
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