OCTOBER 27, 2009 12:00 AM (EDT)
A.M. Best Upgrades Ratings of the Grange Insurance Group and Its Members
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FOR IMMEDIATE RELEASE
OLDWICK, N.J. - OCTOBER 27, 2009 12:00 AM (EDT)
A.M. Best Co. has upgraded the financial strength rating to A- (Excellent) from B++ (Good) and issuer credit ratings to "a-" from "bbb+" for the Grange Insurance Group (Grange) and its members, Grange Insurance Association and Rocky Mountain Fire & Casualty Company. The outlook for all ratings has been revised to stable from positive. All companies are domiciled in Seattle, WA.
The ratings reflect Grange's solid capitalization and favorable operating results due to revised business strategies and risk reduction, rate adequacy and improved reserve development. These positive rating factors are partially offset by the group's susceptibility to catastrophic events in the territories which it writes, compounded by competitive and regulatory pressures in those same territories. The group's outlook is based on its solid capitalization, established distribution network, improved loss reserve adequacy and the expectation of continued favorable operating results.
Operating results were favorable in recent years, allowing the group to record increases to surplus prior to 2008. Given the turmoil in 2008, with the equity and fixed income markets, Grange posted only a modest decrease in surplus. Also, positive pre-tax returns on revenue and surplus generally were achieved and underwriting leverage ratios have trended lower. The group has a long-term personal lines market presence in the Pacific Northwest, with a majority of its gross written premiums in Washington and California.
For Best's Credit Ratings, an overview of the rating process and rating methodologies, please visit Best's Ratings & Analysis.
The principal methodologies used in determining these ratings, including any additional methodologies and factors that may have been considered, can be found at Best's Credit Rating Methodology.
Founded in 1899, A.M. Best Company is a global full-service credit rating organization dedicated to serving the financial and health care service industries, including insurance companies, banks, hospitals and health care system providers.