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FOR IMMEDIATE RELEASE
OLDWICK - DECEMBER 04, 2014 11:29 AM (EST)
A.M. Best has revised the outlook to stable from positive and affirmed the issuer credit rating of "a" for Co-operative Insurance Companies (Co-operative) (Middlebury, VT). Concurrently, A.M. Best has also affirmed the financial strength rating of A (Excellent) of Co-operative; the outlook for this rating remains stable.
The rating action reflects the fluctuation in Co-operative's underwriting and operating results over the past several years and the recent impact of above average fire and weather-related losses on the company's operating results. Co-operative continues to maintain solid-risk adjusted capitalization and enjoys a leading market position as a farm and personal lines writer in Vermont. Supporting the capitalization is modest underwriting leverage, generally favorable loss reserve development and a relative conservative investment portfolio that generates consistent investment income.
Partially offsetting these positive rating factors is Co-operative's concentration of business in Vermont and New Hampshire, which exposes it to weather-related storm losses, competitive market conditions and regulatory actions. Nevertheless, Co-operative continues to maintain an effective reinsurance program designed to mitigate the impact of severe weather-related events on its operating results.
A.M. Best believes that Co-operative's current ratings are well-positioned. Factors that could lead to negative rating action include deterioration in underwriting and operating performance to a level below its peers and a material erosion of surplus that causes a decline in risk-adjusted capital.
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 www.ambest.com/ratings/methodology.
Key insurance criteria reports utilized:
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 visit A.M. Best's Ratings & Criteria Center.
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