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FOR IMMEDIATE RELEASE
OLDWICK - APRIL 11, 2016 03:41 PM (EDT)
A.M. Best has upgraded the financial strength rating (FSR) to A (Excellent) from A- (Excellent) and the issuer credit rating (ICR) to “a” from “a-” of Conemaugh Valley Mutual Insurance Company (Conemaugh) (Johnstown, PA). Additionally, A.M. Best has affirmed the FSR of A (Excellent) and the ICR of “a” of Allegany Co-op Insurance Company (Allegany) (Cuba, NY). The outlook for each rating is stable. Allegany and Conemaugh are collectively referred to as the Allegany-Conemaugh Group.
The upgrade reflects Conemaugh’s affiliation with Allegany through a quota share agreement along with being fully integrated into Allegany’s operations. Additionally, Allegany purchased a $1 million surplus note to Conemaugh on Dec. 11, 2007, and more recently in 2014, Conemaugh began sharing the board of directors with Allegany and both are led by a common management team. Conemaugh offers the same coverage in the Pennsylvania property market as Allegany offers in New York.
Allegany-Conemaugh Group’s ratings reflect its strong risk-adjusted capitalization, continued surplus growth and favorable underwriting and operating performance.
Partially offsetting these rating factors is the Group’s limited geographic spread of risk and elevated expense ratio. As a predominantly property writer in New York and Pennsylvania, the group’s overall earnings are exposed to severe weather-related losses; however, a prudent reinsurance program protects both Allegany and Conemaugh to mitigate such events. While pure loss ratios are favorable, the elevated expense ratio is unfavorable when compared to industry averages.
There could be negative rating pressure if the Group’s operating performance deteriorates markedly and if risk-adjusted capitalization weakens.
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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