Press Release - DECEMBER 10, 2013

A.M. Best Upgrades Ratings of Loudoun Mutual Insurance Company

Maurice Thomas
Senior Financial Analyst
(908) 439-2200, ext. 5794

Rick Decker
Assistant Vice President
(908) 439-2200, ext. 5423

Rachelle Morrow
Senior Manager, Public Relations
(908) 439-2200, ext. 5378

Jim Peavy
Assistant Vice President, Public Relations
(908) 439-2200, ext. 5644


A.M. Best Co. has upgraded the financial strength rating to A (Excellent) from A- (Excellent) and the issuer credit rating to “a” from "a-" of Loudoun Mutual Insurance Company (Loudoun) (Waterford, VA). The outlook for both ratings has been revised to stable from positive.

The rating upgrades and the revised outlook reflect Loudoun’s solid risk-adjusted capitalization, generally consistent operating performance and long-standing local market presence. The ratings further reflect Loudoun’s prudent reinsurance program and favorable balance sheet liquidity. Despite the company’s concentration of exposure to weather-related events, it has performed well in most years. In addition, Loudoun’s performance has held up through various market cycles and challenging market conditions, demonstrating management’s ability to effectively manage its business and position itself for future success.

Partially offsetting these positive rating factors are Loudoun’s limited business profile as reflected by its exposure to significant weather-related events due to its business concentration in Virginia as well as its elevated common stock leverage and expense ratio. Although the company maintains an expense disadvantage, mainly due to its elevated commission costs, its underlying book of business continues to perform well relative to its personal property composite. As a single state writer with a property-predominate book of business, Loudoun’s underwriting results will remain susceptible to weather-related events.

While A.M. Best believes Loudoun’s ratings are well positioned at the current rating level, negative rating actions could occur should the company’s operating results fall significantly short of A.M. Best’s expectations or there is a material decline in its risk-adjusted capitalization level.

The methodology used in determining these ratings is Best’s Credit Rating Methodology, which provides a comprehensive explanation of A.M. Best’s rating process and contains the different rating criteria employed in the rating process. Best’s Credit Rating Methodology can be found at

A.M. Best Company is the world’s oldest and most authoritative insurance rating and information source.

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AMB# Company Name
000664 Loudoun Mutual Insurance Company