OLDWICK, N.J.--(BUSINESS WIRE)--A.M. Best has upgraded the issuer credit rating (ICR) to “bbb+” from “bbb” and affirmed the financial strength rating (FSR) of B++ (Good) of Consumers Insurance USA, Inc. (Consumers) (headquartered in Murfreesboro, TN). The ratings remain under review with positive implications.
The ICR upgrade reflects explicit support that Consumers’ ultimate parent, Motorists Mutual Insurance Company (Motorists) (headquartered in Columbus, OH), has provided in the form of $10.0 million of contributed capital to Consumers on Oct. 20, 2014, which significantly increased Consumers’ risk-adjusted capitalization. This capital contribution has provided Consumers with a substantial cushion against operating losses, which the company has reported in recent quarters due to deterioration in underwriting results. Motorists’ purchase of Consumers and its intermediate parent, Consumers Insurance Group, Inc., was finalized on Sept. 2, 2014, following regulatory approval.
The ratings will remain under review with positive implications, based on the expectation that Consumers will become a member of the Motorists Insurance Pool before year-end 2014. Consequently, any direct premiums, losses or expenses of Consumers will be combined with the members of Motorists Insurance Pool and pro-rated, based on the members’ respective pooling percentages. It is anticipated that when Motorists Insurance Pool is revised to include Consumers, then Consumers’ ratings will be removed from under review status and it will receive a pooled rating with the same ratings and outlook as the other members of Motorists Insurance Pool.
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. Best’s Credit Rating Methodology can be found at www.ambest.com/ratings/methodology.
Key insurance criteria reports utilized:
- Catastrophe Analysis in A.M. Best Ratings
- Insurance Holding Company and Debt Ratings
- Rating Members of Insurance Groups
- Risk Management and the Rating Process for Insurance Companies
- Understanding BCAR for Property/Casualty Insurers
A.M. Best Company is the world's oldest and most authoritative insurance rating and information source. For more information, visit www.ambest.com.
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