A.M. Best Removes From Under Review and Upgrades Ratings of Founders Insurance Company
OLDWICK, N.J.--(BUSINESS WIRE)--A.M. Best has removed from under review with developing implications and upgraded the financial strength rating to A- (Excellent) from B++ (Good) and the issuer credit rating to “a-” from “bbb” of Founders Insurance Company (Founders) (Des Plaines, IL). The outlook assigned to both ratings is stable.
The rating upgrades reflect the execution of an inter-company pooling agreement, effective July 1, 2014, led by Founders’ ultimate parent, Utica Mutual Insurance Company, (Utica) (New Hartford, NY) under which Founders will become a 5% participant in the pool. Previously, Founders was not a member of the pool and was rated separately; however, its performance was reflected in the pool’s consolidated financial results as a subsidiary of Utica. The ratings of Utica have been extended to Founders as a result of its inclusion in the new pooling agreement.
The ratings of Utica and its other affiliates—Graphic Arts Mutual Insurance Company, Republic – Franklin Insurance Company, Utica Lloyd’s of Texas, Utica National Assurance Company, Utica National Insurance Company of Ohio, Utica National Insurance Company of Texas and Utica Specialty Risk Insurance Company—are unchanged by these actions.
A.M. Best does not anticipate changes in the ratings of Utica and its affiliates in the near term; however, negative rating actions could occur if a supportive level of risk-adjusted capitalization is not maintained, underwriting results do not improve and operating earnings do not begin to stabilize.
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.
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