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FOR IMMEDIATE RELEASE
OLDWICK, N.J. - MAY 31, 2011 12:00 AM (EDT)
A.M. Best Co. has revised the outlook to stable from negative and affirmed the financial strength rating of A- (Excellent) and issuer credit ratings of "a-" of Plymouth Rock Assurance Group (PRAG), which includes the operations of its reinsured subsidiary Mt. Washington Assurance Corporation (Concord, NH) and intercompany pool members: Plymouth Rock Assurance Corp. (PRAC), Pilgrim Insurance Company and Plymouth Rock Assurance Casualty Company. All companies are domiciled in Boston, MA, except where specified.
The revised outlook reflects PRAG's enhanced capital management strategies through its strengthened level of risk-adjusted capitalization, improved operating performance, positive loss reserve development and reduced dependence on reinsurance. The company's operating performance and capitalization recovered from the transitional effects of the change in the Massachusetts private passenger automobile marketplace to "managed competition" and the adverse impact of the equity market downturn of 2008.
Over the past three years the group enhanced its pricing segmentation model to refine pricing on risks that meet its underwriting requirements, improved claims handling processes and procedures that lowered severity and increased distribution through agency management initiatives. However, as one of the top five auto carriers in Massachusetts, PRAG's operating results likely will continue to be pressured by its elevated underwriting and investment leverage, geographic concentration, increased competition and uncertainties with evolving insurance regulation.
The principal methodology used in determining these ratings is Best's Credit Rating Methodology - Global Life and Non-Life Insurance Edition, which provides a comprehensive explanation of A.M. Best's rating process and highlights the different rating criteria employed. Additional 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." Methodologies 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.