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Best’s News & Research Service - May 29, 2020 10:14 AM (EDT)

AM Best Revises Outlooks to Stable for Frankenmuth Mutual Insurance Company and Affiliates

  • May 29, 2020 10:14 AM (EDT)
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Oldwick //BestWire// - AM Best has revised the outlooks to stable from positive 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).

AM Best has also 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 ratings reflect Frankenmuth’s balance sheet strength, which AM Best categorizes as strongest, as well as its adequate operating performance, neutral business profile and appropriate enterprise risk management (ERM). The ratings of Patriot Life reflect its balance sheet strength, which AM Best categorizes as very strong, as well as weak operating performance, limited business profile and appropriate ERM.

The revised outlooks to stable for Frankenmuth reflect somewhat variable, although generally positive, underwriting results and fluctuating return measures in recent years. This includes a declining trend in underwriting results during 2018 and 2019 due to higher claims severity in several lines, including commercial auto liability, and lower levels of favorable prior-year reserve development. In addition, Frankenmuth’s geographic concentration exposes the group to weather-related events, as demonstrated by an increase in natural catastrophe losses during 2019.

The rating affirmations for Frankenmuth consider its risk-adjusted capitalization, which is at the strongest level, and solid growth in policyholders’ surplus over the long term, as well as its generally favorable underwriting results over the recent five-year period, with underwriting income reported in each year except 2019. Frankenmuth’s neutral business profile assessment is driven by its solid regional market presence, broad product offering, strong agency relationships and management’s efforts to mitigate its geographic concentration. The group has also refined its ERM program in recent years with a focus on profitability and catastrophe risk management, and continues to invest in technologies and processes designed to improve efficiency and effectiveness for stakeholders.

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 capitalization, well-managed investment portfolio and high levels of liquidity. These positives are partially offset by the continued losses posted by the company year over year as it attempts to gain scale and the overall limited business profile due to that lack of scale.

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 New York, London, Amsterdam, Dubai, Hong Kong, Singapore and Mexico City.



Financial Strength Life Insurers Press Release A.M. Best Rating Services, Inc. Insurance Michigan Property And Casualty Insurers Issuer Credit Rating Best's Credit Rating Action Rating Event


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