CONTACTS:
FOR IMMEDIATE RELEASE
OLDWICK, N.J. - MARCH 20, 2007 12:00 AM (EDT)
A.M. Best Co. has affirmed the financial strength rating of A (Excellent) and assigned issuer credit ratings (ICR) of "a" to Foremost Corporation Group (Foremost) (Caledonia, MI) and its members. The outlook for these ratings is stable.
The ratings reflect Foremost's strong risk-adjusted capitalization on a stand-alone basis, solid operating performance, established market position, as well as the advantages associated with being affiliated with Farmers Insurance Group (Farmers) (Los Angeles, CA). Offsetting rating factors include Foremost's above average underwriting leverage and significant exposure to weather-related losses.
Foremost's strong risk-adjusted capital position is based on its conservative investment risk profile and the catastrophe reinsurance provided by Farmers. Additionally, the group's favorable operating profitability, derived from its strict underwriting discipline and conservative investment policy, has enabled Foremost to produce strong surplus growth over the past five years.
Foremost's elevated underwriting leverage was the result of rollover business from Farmers after its acquisition of Foremost. Net premium leverage is expected to continue to improve through organic surplus growth over the next several years. In addition, Foremost's net exposure to hurricane loss events is substantially reduced by its sound reinsurance program, particularly the catastrophe reinsurance protection provided by Farmers.
The FSR of A (Excellent) has been affirmed and the ICRs of "a" have been assigned to Foremost Corporation Group and its following members:
- American Federation Insurance Company
- Foremost County Mutual Insurance Company
- Foremost Insurance Company Grand Rapids, Michigan
- Foremost Lloyds of Texas
- Foremost Signature Insurance Company
- Foremost Property and Casualty Insurance Company
For Best's Ratings, an overview of the rating process and rating methodologies, please visit Best's Rating Center.
Founded in 1899, A.M. Best Company is a full-service credit rating organization dedicated to serving the financial services industries, including the banking and insurance sectors.