A.M. Best Revises Outlook to Negative for Affinity Mutual Insurance Company

OLDWICK, N.J.--()--A.M. Best Co. has revised the outlook to negative from stable and affirmed the financial strength rating of A- (Excellent) and issuer credit rating of a- of Affinity Mutual Insurance Company (AMIC) (Lima, OH).

The negative outlook reflects the deterioration in AMIC’s underwriting results during 2011 and through the first three quarters of 2012. The deterioration in underwriting results was primarily driven by increases in incurred losses from weather-related events coupled with AMIC’s historically elevated underwriting expense level and the cumulative impact of persistent soft market conditions on the company’s business.

The affirmation of the ratings reflects AMIC’s solid level of risk-adjusted capitalization, modest underwriting leverage and strong balance sheet liquidity. These positive rating attributes are offset by AMIC’s elevated level of common stock leverage, which results in a heightened exposure to equity market volatility and the aforementioned factors that led to the negative outlook.

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: “Risk Management and the Rating Process for Insurance Companies” and “Understanding BCAR for Property/Casualty Insurers.” Best’s Credit Rating Methodology can be found at www.ambest.com/ratings/methodology.

Founded in 1899, A.M. Best Company is the world's oldest and most authoritative insurance rating and information source. For more information, visit www.ambest.com.

Copyright © 2012 by A.M. Best Company, Inc. ALL RIGHTS RESERVED.

Contacts

A.M. Best Co.
Scott Dodd
Financial Analyst
(908) 439-2200, ext. 5582
scott.dodd@ambest.com
or
Jennifer Marshall
Managing Senior Financial Analyst
(908) 439-2200, ext. 5327
jennifer.marshall@ambest.com
or
Rachelle Morrow
Senior Manager, Public Relations
(908) 439-2200, ext. 5378
rachelle.morrow@ambest.com
or
Jim Peavy
Assistant Vice President, Public Relations
(908) 439-2200, ext. 5644
james.peavy@ambest.com

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Contacts

A.M. Best Co.
Scott Dodd
Financial Analyst
(908) 439-2200, ext. 5582
scott.dodd@ambest.com
or
Jennifer Marshall
Managing Senior Financial Analyst
(908) 439-2200, ext. 5327
jennifer.marshall@ambest.com
or
Rachelle Morrow
Senior Manager, Public Relations
(908) 439-2200, ext. 5378
rachelle.morrow@ambest.com
or
Jim Peavy
Assistant Vice President, Public Relations
(908) 439-2200, ext. 5644
james.peavy@ambest.com