AM Best Downgrades Credit Ratings of Allegany Insurance Group’s Members
- August 01, 2025 03:03 PM (EDT)
//BestWire// - AM Best has downgraded the Financial Strength Rating to A- (Excellent) from A (Excellent) and the Long-Term Issuer Credit Ratings to “a-” (Excellent) from “a” (Excellent) of the members of Allegany Insurance Group (Allegany). These Credit Ratings (ratings) apply to Allegany Co-op Insurance Company (Cuba, NY), Conemaugh Valley Mutual Insurance Company (Johnstown, PA), and United Frontier Mutual Insurance Company (Lockport, NY). The outlook of these ratings has been revised to stable from negative.
The ratings reflect Allegany’s balance sheet strength, which AM Best assesses as very strong, as well as its adequate operating performance, limited business profile and appropriate enterprise risk management (ERM).
The downgrading of the ratings reflects a revision in the group’s operating performance assessment to adequate from strong, considering additional volatility in key operating performance metrics over recent years. Allegany has reported higher incurred losses, which have been a product of weather-related events, severe fires, larger liability claims, and inflationary pressures causing loss costs to rise. Although the group recorded a combined ratio below break-even in 2024, it produced its second underwriting loss in the last five-year period, and volatility increased through March 31, 2025, as evidenced by a combined ratio well in excess of break-even. Operating results over recent years have shifted the group out of alignment with the strong assessment and more aligned with the adequate assessment.
The outlooks have been revised to stable from negative in light of the downgrading of the organization’s ratings. The stable outlooks reflect Allegany’s strongest level of risk-adjusted capitalization, as measured by Best’s Capital Adequacy Ratio (BCAR), which is expected to be maintained in support of its overall very strong balance sheet strength assessment. The outlooks also consider the group’s limited business profile, driven by its property concentrated book of business in New York and Pennsylvania, and its appropriate ERM supported by a developed and embedded risk framework. Prospectively, Allegany will focus on strategic growth initiatives, specifically in the commercial and farm lines, enhancing rate adequacy and refining risk selection, all of which should lead to stabilized operating results, which align well with its adequate operating performance assessment.
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 Performance Assessments, 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.