A.M. Best Co. has affirmed the financial strength ratings (FSR) of A- (Excellent) and issuer credit ratings of “a-” of Employers Mutual Casualty Company (EMCC) and its six property/casualty subsidiaries, which operate under an inter-company pooling agreement led by EMCC and its separately rated subsidiary, EMC Reinsurance Company (EMC Re), a reinsurance company owned indirectly by EMCC.
Concurrently, A.M. Best has affirmed the ICR of “bbb-” of EMC Insurance Group Inc. (EMCI) (NASDAQ: EMCI), a downstream holding company majority owned by EMCC and the immediate parent of EMC Re. The outlook for all ratings is positive. All of the above named companies are headquartered in Des Moines, IA. (See below for a detailed listing of companies.)
The ratings of EMCC and EMC Re reflect their strong level of risk-adjusted capital, which is supported by generally positive levels of pre-tax operating and net income; favorable development of prior years’ loss and loss adjustment expense reserves; generally favorable core underwriting results; and the benefits the companies will derive from management’s actions over the past several years associated with pricing and risk selection, claims management and reserving methodology.
Partially offsetting these positive rating factors is EMCC and EMC Re’s exposure to catastrophe and weather-related events, which was evident in 2011; above-average levels of common stock leverage; potential for a lower level of favorable development of prior years’ loss reserves in the future; and the continuing impact of challenging insurance market conditions, particularly on EMCC’s primary business. Further offsetting EMC Re’s ratings are its dependence on EMCC as a production source.The ratings of EMCI reflect the capital strength of its property/casualty affiliates, the support of EMCC and the absence of financial leverage, with no public debt outstanding. Key rating factors that may lead to positive rating actions include EMCC and EMC Re maintaining strong risk-adjusted capitalization while reporting improved operating and underwriting results. However, factors that may lead to negative rating actions include a trend of increasingly deteriorating underwriting and operating performance to a level below peers or an erosion of surplus to an extent to cause a significant decline in risk-adjusted capitalization.
Select the service that is right for you!COMPARE ALL SERVICES
Jim Cramer and Stephanie Link actively manage a real portfolio and reveal their money management tactics while giving advanced notice before every trade.
- $2.5+ million portfolio
- Large-cap and dividend focus
- Intraday trade alerts from Cramer
- Weekly roundups
Access the tool that DOMINATES the Russell 2000 and the S&P 500.
- Buy, hold, or sell recommendations for over 4,300 stocks
- Unlimited research reports on your favorite stocks
- A custom stock screener
- Upgrade/downgrade alerts
Jim Cramer's protege, David Peltier, identifies the best of breed dividend stocks that will pay a reliable AND significant income stream.
- Diversified model portfolio of dividend stocks
- Alerts when market news affect the portfolio
- Bi-weekly updates with exact steps to take - BUY, HOLD, SELL
All of Real Money, plus 15 more of Wall Street's sharpest minds delivering actionable trading ideas, a comprehensive look at the market, and fundamental and technical analysis.
- Real Money + Doug Kass Plus 15 more Wall Street Pros
- Intraday commentary & news
- Ultra-actionable trading ideas
Our options trading pros provide daily market commentary and over 100 monthly option trading ideas and strategies to help you become a well-seasoned trader.
- 100+ monthly options trading ideas
- Actionable options commentary & news
- Real-time trading community
- Options TV