JUNE 28, 2016 09:44 AM (EDT)
A.M. Best Upgrades Issuer Credit Ratings of Members of Erie Insurance Group
|Jonathan Harris, CFA, FRM |
Senior Financial Analyst
+1 908 439 2200, ext. 5771
Jacqalene Lentz, CPA
Managing Senior Financial Analyst
+1 908 439 2200, ext. 5762
Manager, Public Relations
+1 908 439 2200, ext. 5159
Assistant Vice President, Public Relations
+1 908 439 2200, ext. 5644
FOR IMMEDIATE RELEASE
OLDWICK - JUNE 28, 2016 09:44 AM (EDT)
A.M. Best has upgraded the issuer credit ratings (ICR) to “aa” from “aa-” and affirmed the financial strength rating (FSR) of A+ (Superior) of the property/casualty members of Erie Insurance Group (Erie). The outlook for the ICRs has been revised to stable from positive, while the outlook for the FSR remains stable. All companies are domiciled in Erie, PA, unless otherwise specified.
The lead company in Erie is Erie Insurance Exchange. The rest of the group is made up of inter-company pooling members Erie Insurance Company and Erie Insurance Company of New York (Rochester, NY), and reinsured subsidiaries Erie Insurance Property & Casualty Company and Flagship City Insurance Company.
The upgrade of Erie’s ICR recognizes the group’s superior risk-adjusted capitalization, favorable five-year operating performance and well-established regional market presence. The group’s strong capital position is reflective of management’s conservative operating philosophy and modest underwriting leverage measures. Erie’s profitable operating results are derived from management’s adherence to underwriting and pricing discipline, strong investment income, well-established agency relationships and controlled operating expenses. These positive attributes are partially offset by the group’s geographic concentration in the mid-Atlantic region, which exposes its operating results to weather-related losses, regulatory changes and competitive market pressures. However, Erie continues to maintain a comprehensive reinsurance program in an effort to mitigate the impact of weather-related losses on its profitability and capitalization.
A.M. Best believes upward rating movement at this time is unlikely. Negative rating action could occur from a significant and sustained decline in underwriting or operating results, the occurrence of a sudden large or catastrophic loss event that materially hinders risk-adjusted capitalization or any material deviation from the company’s submitted financial projections.
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 see A.M. Best’s Recent Rating Activity web page.
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