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FOR IMMEDIATE RELEASE
OLDWICK - APRIL 22, 2021 01:35 PM (EDT)
AM Best has upgraded the Financial Strength Rating to A (Excellent) from A- (Excellent) and the Long-Term Issuer Credit Ratings to “a” from “a-” of Union Mutual Fire Insurance Company (Union Mutual Fire), the lead property/casualty company and its wholly owned subsidiary, New England Guaranty Insurance Company, Inc. (New England Guaranty), as well as its mutual affiliate, Community Mutual Insurance Company (Community Mutual), which are collectively referred to as Union Mutual of Vermont Companies (Union Mutual). Union Mutual Fire and New England Guaranty are domiciled in Montpelier, VT, while Community Mutual is domiciled in Latham, NY. The outlook of these Credit Ratings (ratings) was revised to stable from positive.
The ratings reflect Union Mutual’s balance sheet strength, which AM Best assesses as very strong, as well as its adequate operating performance, neutral business profile and appropriate enterprise risk management.
The rating upgrades reflect the group’s improved overall balance sheet strength. Consistently profitable operating performance has generated robust policyholders’ surplus growth over the past five years, which in turn has solidified the capital position. Union Mutual has maintained risk-adjusted capitalization at the strongest level, as measured by Best’s Capital Adequacy Ratio (BCAR), while organically growing surplus through underwriting income. The investment portfolio is primarily composed of fixed income securities, and while the company does have exposure to equity risk through its common stock portfolio, the allocation is capped per investment policy guidelines and partially mitigated through predominant investment in exchange traded funds. Furthermore, management has continually refined its loss reserving practices, which have traditionally generated annual overall redundancies.
Operating performance is expected to remain adequate, reflective of profitable results that remain subject to moderate volatility due to weather activity. Management continues to refine its profile, which is focused on New York and New England commercial multiperil and homeowners business to solidify performance. Union Mutual employs an ERM program that is considered appropriate for its scope.
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 media use of Best’s Credit Ratings and AM Best press releases, please view Guide for Media - Proper Use of Best’s Credit Ratings and AM Best Rating Action Press Releases.
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.