MAY 02, 2013 12:00 AM (EDT)

A.M. Best Upgrades Ratings of The Harford Mutual Insurance Company and Its Property/Casualty Subsidiary

Robert Valenta
Senior Financial Analyst
(908) 439-2200, ext. 5291

Gerard Altonji
Assistant Vice President
(908) 439-2200, ext. 5626

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

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


OLDWICK, N.J. - MAY 02, 2013 12:00 AM (EDT)
A.M. Best Co. has upgraded the financial strength rating to A (Excellent) from A- (Excellent) and issuer credit ratings to “a” from “a-” of The Harford Mutual Insurance Company and its property/casualty subsidiary, Firstline National Insurance Company, collectively known as Harford Mutual Insurance Companies (Harford), which operate under an inter-company pooling agreement. Both companies are domiciled in Bel Air, MD. The outlook for all ratings has been revised to stable from positive.

The rating actions reflects Harford’s excellent level of risk-adjusted capital, which is supported by a generally improved underwriting and operating performance since 2003, consistently favorable development of prior years’ loss and loss adjustment expense reserves, low underwriting leverage relative to its peers and strong liquidity. Management’s focus on underwriting discipline, price monitoring, risk aggregation, reserving methodology, internal controls and technology in recent years has contributed to Harford’s improved underwriting performance.

Partially offsetting these positive rating factors are Harford’s underwriting losses in 2010 and 2011, which were driven by unusually high catastrophe and weather-related losses and a spike in large fire losses, a consistently higher expense ratio than its peers and elevated levels of common stock leverage. Surplus and risk-adjusted capitalization remained strong despite operating losses in 2010 and 2011 as a result of management’s strong risk culture, which included an effective reinsurance program.

While Harford is well positioned at its current rating level, negative pressure on the outlook could occur if heavy underwriting losses return.

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

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