Best’s News & Research Service - May 05, 2017 02:30 PM (EDT)
A.M. Best Revises Outlooks to Positive for Frankenmuth Mutual Insurance Company and Affiliates
- May 05, 2017 02:30 PM (EDT)
Oldwick //BestWire// - A.M. Best has revised the outlooks to positive from stable and affirmed the Financial Strength Ratings (FSR) of A (Excellent) and the Long-Term Issuer Credit Ratings (Long-Term ICR) of “a+” of Frankenmuth Mutual Insurance Company and its affiliates, Ansur America Insurance Company, Patriot Insurance Company (Yarmouth, ME), ASure Worldwide Insurance Company and Fortuity Insurance Company (collectively referred to as Frankenmuth).
A.M. Best also has affirmed the FSR of A (Excellent) and Long-Term ICR of “a” of Patriot Life Insurance Company (Patriot Life). The outlook of these Credit Ratings (ratings) is stable. All companies are headquartered in Frankenmuth, MI, unless otherwise noted.
The outlook revisions to positive for Frankenmuth reflect improved underwriting and operating results over the past several years, following a series of strategic initiatives to improve underwriting profitability. In addition, management’s expense-saving initiatives have resulted in the underwriting expense ratio improving in the more recent years despite the costs associated with ongoing expansion in its Southeast and Northeast regions, along with continued investment in implementing technologies and processes designed to improve efficiency and effectiveness for stakeholders. Frankenmuth’s enterprise risk management program also has been refined over the past several years with a focus on profitability and catastrophe risk mitigation.
The rating affirmations reflect Frankenmuth’s strong risk-adjusted capitalization, positive after-tax income in eight of the past ten years, solid regional market presence, strong agency relationships and management’s efforts to mitigate its geographic risk concentration.
Partially offsetting these positive rating factors are the group’s somewhat variable, although positive, underwriting results and fluctuating return measures. Further, despite the aforementioned expansion, Frankenmuth’s geographic concentration exposes it to weather-related events, exemplified by the heightened losses reported in 2011 and 2014, as well as economic and judicial issues.
The ratings of Patriot Life reflect the formal guaranty issued by Frankenmuth with respect to Patriot Life’s liabilities, as well as its favorable risk-adjusted and absolute capital, well-managed investment portfolio and high levels of liquidity. Partially offsetting these strengths are Patriot Life’s operating losses over the past five years and a limited business profile.
This press release relates to Credit Ratings 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. For additional information regarding the use and limitations of Credit Rating opinions, please view Understanding Best’s Credit Ratings.
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