JANUARY 09, 2013 12:00 AM (EST)
A.M. Best Upgrades Ratings of Austin Mutual Insurance Company
Senior Financial Analyst
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Managing Senior Financial Analyst
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Senior Manager, Public Relations
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Assistant Vice President, Public Relations
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FOR IMMEDIATE RELEASE
OLDWICK, N.J. - JANUARY 09, 2013 12:00 AM (EST)
A.M. Best Co. has upgraded the financial strength rating to A (Excellent) from B (Fair) and the issuer credit rating to a+ from bb+ of Austin Mutual Insurance Company (Austin) (Maple Grove, MN). The outlook for both ratings has been revised to stable from positive.
The upgrades are due to the increase in Austins intercompany quota share reinsurance agreement from 35% to 100% as of January 1, 2013, with the lead company of Main Street America Group, NGM Insurance Company, having become a fully reinsured member.
A.M. Best does not expect to downgrade (or place a negative outlook on) the ratings of Austin in the near to mid-term. However, such actions would ensue if the companys relationship with the Main Street America Group, (most specifically its intercompany reinsurance arrangements) were to incur material changes or have a severe reduction in Austins capitalization due to an increased credit leverage of its reinsured book of business in the event of a catastrophe.
The methodology used in determining these ratings is Bests Credit Rating Methodology, which provides a comprehensive explanation of A.M. Bests rating process and contains the different rating criteria employed in the rating process. Key criteria utilized include: Risk Management and the Rating Process for Insurance Companies; Rating Members of Insurance Groups; and Understanding BCAR for Property/Casualty Insurers. Bests Credit Rating Methodology can be found at www.ambest.com/ratings/methodology.
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