AM Best

AM Best Affirms Credit Ratings of Members of Erie Insurance Group and Erie Family Life Insurance Company


Dan Mangano
Senior Financial Analyst
+1 908 439 2200, ext. 5547

Kate Steffanelli
Senior Financial Analyst
+1 908 439 2200, ext. 5063
Christopher Sharkey
Manager, Public Relations
+1 908 439 2200, ext. 5159

Jim Peavy
Director, Communications
+1 908 439 2200, ext. 5644


OLDWICK - JULY 28, 2021 11:04 AM (EDT)
AM Best has affirmed the Financial Strength Rating (FSR) of A+ (Superior) and the Long-Term Issuer Credit Ratings (Long-Term ICR) of “aa” (Superior) of the property/casualty (P/C) members of Erie Insurance Group (Erie). The outlook of the FSR is stable while the outlook for the Long-Term ICRs is negative. Additionally, AM Best has affirmed the FSR of A (Excellent) and the Long-Term ICR of “a” (Excellent) of Erie Family Life Insurance Company (EFL). The outlook of these Credit Ratings (ratings) is stable. All companies are domiciled in Erie, PA, unless otherwise specified.

Erie Insurance Exchange is the lead company of Erie; the remainder of the P/C group is composed 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 ratings of Erie reflect its balance sheet strength, which AM Best assesses as strongest, as well as its strong operating performance, favorable business profile and appropriate enterprise risk management (ERM).

The balance sheet strength assessment is supported Erie’s risk-adjusted capitalization at the strongest level, as measured by Best’s Capital Adequacy Ratio (BCAR), consistent surplus growth and favorable loss reserve trends. While Erie is concentrated in the mid-Atlantic, which exposes the group to weather-related losses, it benefits from its extensive independent agency force and large market shares in its home states.

The negative outlook on Erie’s Long-Term ICR reflects the deterioration in the company’s operating performance, which is due mainly to weather-related losses in 2018 and 2019. While the company’s operating results did improve in 2020, predominantly from a drop in claims frequency in auto lines and a decrease in weather-related events, Erie’s five-year and 10-year operating results do continue to lag similarly related peers. If the five and 10-year trends continue to show sufficient underwriting deterioration such that operating results and overall operating performance also are impacted, the overall operating performance assessment could suffer a downward revision.

The ratings of EFL reflect its balance sheet strength, which AM Best assesses as very strong, as well as its adequate operating performance, neutral business profile and appropriate ERM.

EFL’s balance sheet strength assessment is supported by risk-adjusted capitalization at the strongest level, as measured by BCAR, as well as the low use of reinsurance and no financial leverage. Invested assets are primarily allocated to investment grade bonds, which are diversified across industries and sectors. The company has continued to execute on its strategy by marketing ordinary life insurance and individual annuity products for the parent company’s P/C client base. Earnings have deteriorated in recent periods, reflecting the statutory strain in the growing book of business. AM Best will continue to monitor this trend.

This press release relates to Credit Ratings that have been published on AM 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 AM Best’s Recent Rating Activity web page. For additional information regarding the use and limitations of Credit Rating opinions, please view Guide to Best’s Credit Ratings. For information on the proper use of Best’s Credit Ratings, Best’s Preliminary Credit Assessments and AM Best press releases, please view Guide to Proper Use of Best’s Ratings & Assessments.

AM Best is a global credit rating agency, news publisher and data analytics provider specializing in the insurance industry. Headquartered in the United States, the company does business in over 100 countries with regional offices in London, Amsterdam, Dubai, Hong Kong, Singapore and Mexico City.

Related Companies

For information about each company, including the Best's Credit Reports, group members (where applicable) and news stories, click on the company name. An additional purchase may be required.