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FOR IMMEDIATE RELEASE
OLDWICK, N.J. - FEBRUARY 14, 2012 12:00 AM (EST)
A.M. Best Co. has assigned a financial strength rating of B+ (Good) and an issuer credit rating of “bbb-” to Rutgers Enhanced Insurance Company (Rutgers Enhanced) (Cherry Hill, NJ). The outlook assigned to both ratings is negative.
These rating actions follow the execution of an approved pooling agreement between Rutgers Enhanced, Rutgers Casualty Insurance Company (Cherry Hill, NJ) and American European Insurance Company (Concord, NH), which make up the American European Insurance Group (AEG). This reinsurance agreement, in conjunction with various operating synergies provided by the members of AEG, has resulted in Rutgers Enhanced’s inclusion into the group’s ratings.
In May 2011, A.M. Best affirmed the FSR of B+ (Good) and ICRs of “bbb-” of AEG based on its solid capitalization and recent actions taken by management to improve the overall results that led to the improved 2010 operating results. The outlook for these ratings is negative.
These positive rating factors are partially offset by AEG’s history of volatile underwriting results and declining investment returns that have led to weak earnings in prior years.
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. Key criteria utilized include: “Risk Management and the Rating Process for Insurance Companies”; “Understanding BCAR for Property/Casualty Insurers”; “Rating Members of Insurance Groups”; and “A.M. Best’s Ratings & the Treatment of Debt.” Best’s Credit Rating Methodology can be found at www.ambest.com/ratings/methodology.
Founded in 1899, A.M. Best Company is the world’s oldest and most authoritative insurance rating and information source.