Best’s News & Research Service - April 28, 2015 01:03 PM (EDT)
A.M. Best Upgrades Ratings of Forestry Mutual Insurance Company
- April 28, 2015 01:03 PM (EDT)
Oldwick //BestWire// - A.M. Best has upgraded the financial strength rating to B+ (Good) from B (Fair) and the issuer credit rating to "bbb-" from "bb+" of Forestry Mutual Insurance Company (FMIC) (Raleigh, NC). The outlook for both ratings remains positive.
The upgrade reflects FMIC's significant improvement in recent years in underwriting and operating results, as well as positive underwriting cash flows. FMIC continues to benefit from geographic diversification entering markets in neighboring states, management initiatives taken in recent years to restructure its reinsurance program to reduce net loss ratio volatility, non-renewal of unprofitable accounts and the implementation of a zero-tolerance policy for failure to comply with safety requirements. The outlook reflects A.M. Best's expectation of positive rating movement in the long term if FMIC's results continue to improve. While FMIC is well- positioned at its current rating level, negative rating actions could occur if earnings were to decline and/or capitalization levels were to materially deteriorate.
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. Best's Credit Rating Methodology can be found at www.ambest.com/ratings/methodology.
Key insurance criteria reports utilized:
- Risk Management and the Rating Process for Insurance Companies
- The Treatment of Terrorism Risk in the Rating Evaluation
- Understanding BCAR for Property/Casualty Insurers
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