AM Best Removes From Under Review With Negative Implications and Affirms Credit Ratings of The Northern Neck Insurance Company

OLDWICK, N.J.--(BUSINESS WIRE)--AM Best has removed from under review with negative implications and affirms the Financial Strength Rating (FSR) of A- (Excellent) and the Long-Term Issuer Credit Rating (Long-Term ICR) of “a-” (Excellent) of The Northern Neck Insurance Company (NNIC) (Irvington, VA). Concurrently, AM Best has assigned an FSR of A- (Excellent) and a Long-Term ICR of “a-” (Excellent) to Frederick Mutual Insurance Company (Fredrick) (Frederick, MD). The outlook assigned to these Credit Ratings (ratings) is stable. These companies comprise a newly formed group, Northern Neck Group.

The ratings reflect Northern Neck Group’s balance sheet strength, which AM Best assesses as very strong, as well as its adequate operating performance, limited business profile and appropriate enterprise risk management (ERM).

The removal of the under review with negative implications status and assignment of the stable outlooks reflects AM Best’s evaluation of the group’s consolidated operating performance and prospective business plans. Additionally, the rating actions follow recent regulatory approval of the pooling agreement between NNIC and Frederick, effective Jan. 1, 2026. Effective Dec. 19, 2025, NNIC purchased 49.99% interest in Frederick via a stock purchase agreement. Post-transaction close, Frederick’s entire board of directors and key executive officers were replaced to align with NNIC. The affiliation provides several strategic benefits including product diversification, geographic expansion, accelerated growth capacity and improved economies of scale.

The stable outlooks reflect the expectation that management’s efforts to improve underwriting performance will continue to gain traction and align with plans as communicated to AM Best, with the overall group relying comparatively less on investment income to generate earnings as has been done historically. Furthermore, the overall balance sheet strength assessment is expected to remain very strong, supported by risk-adjusted capitalization at the strongest level, as measured by Best’s Capital Adequacy Ratio (BCAR), and stabilization of loss reserve development trends. While the strategic partnership with Frederick adds small commercial business to complement NNIC’s personal lines portfolio, the business profile assessment reflects the predominantly property book of business and geographic concentration in Virginia, which exposes the group to frequent and severe weather-related events and competitive market conditions. The ERM assessment is supported by the group’s developed framework and appropriate risk management capabilities.

This press release relates to Credit Ratings that have been published on AM Best’s website. For all rating information relating to the release and pertinent disclosures, including details of the office responsible for issuing each of the individual ratings referenced in this release, please see AM Best’s Recent Rating Activity web page. For additional information regarding the use and limitations of Credit Rating opinions, please view Guide to Best's Credit Ratings. For information on the proper use of Best’s Credit Ratings, Best’s Performance Assessments, Best’s Preliminary Credit Assessments and AM Best press releases, please view Guide to Proper Use of Best’s Ratings & Assessments.

AM Best is a global credit rating agency, news publisher and data analytics provider specializing in the insurance industry. Headquartered in the United States, the company does business in over 100 countries with regional offices in London, Amsterdam, Dubai, Hong Kong, Singapore and Mexico City. For more information, visit www.ambest.com.

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