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FOR IMMEDIATE RELEASE
OLDWICK, N.J. - MAY 01, 2012 12:00 AM (EDT)
A.M. Best Co. has affirmed the financial strength rating (FSR) of A (Excellent) and the issuer credit ratings (ICR) of "a+" of Main Street America Group (Jacksonville, FL) and its members. The outlook for these ratings is stable.
Concurrently, A.M. Best has assigned an FSR of A (Excellent) and an ICR of "a+" to Spring Valley Mutual Insurance Company (Spring Valley, MN), a new fully reinsured member of the group. The outlook assigned to both ratings is stable.
The ratings and outlook of Main Street America Group reflect its focused marketing and branding strategies, disciplined underwriting philosophy and pricing segmentation, solid risk-adjusted capitalization, historically positive operating performance, diversified product offerings and established regional market presence along the East Coast. Partially offsetting these positive rating factors are the group’s somewhat elevated underwriting leverage and expense ratios, susceptibility to weather-related losses in its geographic footprint, historically fluctuating reserve development, competitive market conditions throughout its underwriting footprint, combined with a recent plateauing in core underwriting results exacerbated by lower investment yields, which is a result of the current financial market conditions.
While A.M. Best does not expect to downgrade (or place a negative outlook on) the ratings of the Main Street America Group in the near to mid-term, such actions would ensue if the group were to incur material losses in its capitalization; have a severe reduction in the profitability of its core book of business; be unable to contain the group's exposure to catastrophic events within its underwriting footprint with the current set of preventative measures that have been recently put in place; or have substantial adverse reserve development relative to their peers, as well as the industry's averages.
The FSR of A (Excellent) and the ICRs of "a+" have been affirmed for Main Street America Group and its following members:
-Grain Dealers Mutual Insurance Company
-Great Lakes Casualty Insurance Company
-MSA Insurance Company
-Main Street America Assurance Company
-NGM Insurance Company
-Old Dominion Insurance Company
-Main Street America Protection Insurance Company
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. Key criteria utilized include: “Risk Management and the Rating Process for Insurance Companies”; “Understanding BCAR for Property/Casualty Insurers”; and “Rating Members of Insurance Groups.” Best’s Credit Rating Methodology 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.