Press Release - APRIL 29, 2016

A.M. Best Revises Issuer Credit Rating Outlook to Positive for Members of Central Insurance Companies


CONTACTS:
 Kimberly Muccia
Financial Analyst
+1 908 439 2200, ext. 5731
kimberly.muccia@ambest.com

Rick Decker
Assistant Vice President
+1 908 439 2200, ext. 5423
rick.decker@ambest.com

Christopher Sharkey
Manager, Public Relations
+1 908 439 2200, ext. 5159
christopher.sharkey@ambest.com

Jim Peavy
Assistant Vice President, Public Relations
+1 908 439 2200, ext. 5644
james.peavy@ambest.com

FOR IMMEDIATE RELEASE

OLDWICK - APRIL 29, 2016
A.M. Best has revised the issuer credit rating (ICR) outlook to positive from stable and affirmed the financial strength rating (FSR) of A (Excellent) and the ICRs of “a” of Central Mutual Insurance Company and All America Insurance Company, which are collectively referred to as Central Insurance Companies (Central). Both companies are domiciled in Van Wert, OH. The outlook for the FSR remains stable.

The positive outlook is based on Central’s improving underwriting and operating results that were reported in recent years and are expected to continue in the near term. These results were generated by significant actions taken by management over several years that were designed to improve rate adequacy and reduce risk.

Central’s positive rating attributes include excellent risk-adjusted capitalization, which is reflective of low underwriting leverage enhanced by positive cash flows and conservative reserving practices, and very favorable underwriting and operating performance relative to its peer group. The FSR also recognizes Central’s competitive advantages within its core personal and commercial segments, its high-quality customer services, strong agency relationships and geographic spread of risk.

These positive rating factors are partially offset by unfavorable underwriting results in the beginning of the five-year period, which were related to a series of severe weather-related events in excess of historical averages. Additionally, Central maintains elevated common stock leverage when compared with its peer group, however, net investment income is consistent and steady.

Further positive rating actions could occur if Central continues its earnings improvement, leading to favorable capital appreciation and risk-adjusted capitalization. Negative rating actions could occur if Central’s operating performance deteriorates markedly or if risk-adjusted capitalization were to weaken.

This press release relates to rating(s) that have been published on A.M. 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 A.M. Best’s Recent Rating Activity web page.

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


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