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FOR IMMEDIATE RELEASE
OLDWICK - JULY 31, 2019 09:49 AM (EDT)
AM Best has upgraded the Long-Term Issuer Credit Rating (Long-Term ICR) to “bbb+” from “bbb” and affirmed the Financial Strength Rating (FSR) of B++ (Good) of Forestry Mutual Insurance Company (FMIC) (Raleigh, NC). The outlook of the FSR has been revised to positive from stable while the outlook of the Long-Term ICR remains positive.
The Credit Ratings (ratings) reflect FMIC’s balance sheet strength, which AM Best categorizes as very strong, as well as its adequate operating performance, limited business profile and appropriate enterprise risk management.
The positive outlooks reflect AM Best’s expectation that the company’s underwriting results will reflect lesser volatility in the medium term through its disciplined underwriting selection, loss control and claims management, while maintaining very strong balance sheet strength.
The rating actions also reflect FMIC’s improvement in its risk-based capitalization as management has organically grown surplus by nearly double over the past five years through sound underwriting, loss control and mitigation. The company’s primary layer retention remains manageable and underwriting leverage and reserve confidence continue to improve due to ongoing profitability. Despite some recent atypical losses, FMIC has been able to effect very manageable outcomes via its claims management and protect its balance sheet with its conservative reserving approach.
Positive rating action could occur if FMIC’s operating performance continues to compare favorably relative with its peers, with less volatility, while maintaining very strong risk-based capitalization and stable reserve development trends. Negative rating action could occur if there is a material deterioration in the company’s operating performance or if capitalization falls substantially short of AM Best’s expectations.
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 Understanding Best’s Credit Ratings. For information on the proper media use of Best’s Credit Ratings and AM Best press releases, please view Guide for Media - Proper Use of Best’s Credit Ratings and AM Best Rating Action Press Releases.
AM Best is a global rating agency and information provider with a unique focus on the insurance industry.