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FOR IMMEDIATE RELEASE
OLDWICK, N.J. - APRIL 14, 2009 12:00 AM (EDT)
A.M. Best Co. has affirmed the financial strength rating (FSR) of A- (Excellent) and issuer credit ratings (ICR) of "a-" of Columbia Insurance Group (Columbia) (Columbia, MO) and its members. The outlook for all ratings is stable. (See below for a detailed listing of the companies.)
The affirmations reflect Columbia's solid risk-adjusted capitalization, underwriting discipline and its long-standing market presence. These strengths are further supported by management's commitment to balance sheet integrity, conservative reserving methodology and an enhanced risk management culture.
These positive rating factors are partially offset by Columbia's business concentration in the Midwest, which exposes its earnings to catastrophe losses stemming from the New Madrid fault line as well as frequent and severe weather-related events and competitive market pressures. However, the group maintains prudent reinsurance to help mitigate the potential effects of catastrophic weather events. In 2008, deterioration in Columbia's capital position as measured by Best's Capital Adequacy Ratio (BCAR) primarily was attributed to widespread storm losses and sizable realized and unrealized capital losses due to the significant downturn of the financial markets.
A.M. Best also has upgraded the FSR to A- (Excellent) from B+ (Good) and ICR to "a-" from "bbb-" of Georgia Casualty & Surety Company (Georgia Casualty) (Atlanta, GA). Additionally, A.M. Best has affirmed the FSR of A- (Excellent) and ICR of "a-" of Association Casualty Insurance Company (Association Casualty) (Austin, TX). The outlook for these ratings is stable. These companies were acquired by their parent, Columbia Mutual Insurance Company (Columbia, MO) in March 2008.
These rating actions reflect Georgia Casualty and Association Casualty's addition to the Columbia inter-company pool. As these entities become fully integrated into the organization, A.M. Best believes they will benefit through greater operational support and Columbia's experienced leadership. Georgia Casualty and Association Casualty also provide the group with greater overall product and geographic diversification.
The FSR of A- (Excellent) and ICRs of "a-" apply to Columbia Insurance Group and its following property/casualty members:
- Columbia Mutual Insurance Company
- Columbia National Insurance Company
- Citizens Mutual Insurance Company
- Georgia Casualty & Surety Company
- Association Casualty Insurance Company
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.