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FOR IMMEDIATE RELEASE
OLDWICK, N.J. - MARCH 19, 2008 12:00 AM (EDT)
A.M. Best Co. has assigned a financial strength rating (FSR) of A- (Excellent) and an issuer credit rating (ICR) of "a-" to Conemaugh Valley Mutual Insurance Company (Conemaugh) (Johnstown, PA). The outlook for both ratings is stable.
The ratings are based on Conemaugh's recent affiliation with Allegany Co-Op Insurance Company (Allegany Co-Op) (Cuba, NY). On December 11, 2007, Conemaugh entered into a surplus note and expense sharing agreement with Allegany Co-Op. Conemaugh will expand Allegany Co-Op's operations into the Pennsylvania property market. Additionally through the affiliation, Allegany Co-Op provides marketing, agency appointment, underwriting, policy development, rating, claims and litigation management and support to Conemaugh. Conemaugh's ratings also reflect its favorable risk-adjusted capitalization and recently improved financial performance.
Partially offsetting these rating factors is Conemaugh's limited geographic spread of risk and elevated expense ratio. As a predominant property writer in Pennsylvania, the company's overall earnings are exposed to severe weather-related events, such as winter freeze and snow. While pure loss ratios are favorable, loss adjustment expenses are elevated compared to the property industry averages.
For Best's Ratings, an overview of the rating process and rating methodologies, please visit Best's Rating Center.
Founded in 1899, A.M. Best Company is a global full-service credit rating organization dedicated to serving the financial and health care service industries, including insurance companies, banks, hospitals and health care system providers.