OLDWICK, N.J.--(BUSINESS WIRE)--A.M. Best has assigned a Financial Strength Rating (FSR) of A- (Excellent) and a Long-Term Issuer Credit Rating (Long-Term ICR) of “a-” to Pittstown Cooperative Fire Ins. Co. (Pittstown). The outlook assigned to these Credit Ratings (ratings) is stable. Concurrently, A.M. Best has affirmed the FSR of A- (Excellent) and the Long-Term ICR of “a-” of Security Mutual Insurance Company (Security Mutual). The outlook of these ratings is stable. Both companies are domiciled in Ithaca, NY.
The ratings reflect the state approval of a 100% quota share reinsurance agreement between Pittstown and Security Mutual. Additionally, Pittstown was incorporated into Security Mutual through an affiliation agreement, and is fully integrated into the group’s operations and management. The companies are collectively referred to as Security Mutual Group.
The ratings reflect Security Mutual Group’s balance sheet strength, which A.M. Best categorizes as strongest, as well as its adequate operating performance, limited business profile and appropriate enterprise risk management (ERM).
The group’s balance sheet strength is supported by the strongest level of risk-adjusted capitalization, as measured by Best’s Capital Adequacy Ratio (BCAR), reflective of low underwriting leverage, a high quality and relatively conservative investment profile, and generally favorable loss reserving trends. Consistent year over year, surplus growth somewhat mitigates limited financial flexibility and limited scale. Net underwriting earnings that compare similarly with the composite averages are supplemented with consistent investment income to produce profitable, double-digit operating return measures, which experience a relatively low to moderate degree of volatility. The group’s business profile is viewed as limited based on its geographical concentration as a single-state writer in New York, as well as its product risk, writing mainly the homeowners line. Lastly, Security Mutual group benefits from appropriate ERM, including a comprehensive reinsurance program.
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