CONTACTS:
FOR IMMEDIATE RELEASE
OLDWICK, N.J. - MAY 09, 2011 12:00 AM (EDT)
A.M. Best Co. has upgraded the financial strength rating (FSR) to A+ (Superior) from B++ (Good) and the issuer credit ratings (ICRs) to "aa-" from "bbb" of Keystone Insurance Company (Keystone) (Haverford, PA) and its subsidiaries, AAA Mid-Atlantic Insurance Company (AAA MAIC) (Haverford, PA) and AAA Mid-Atlantic Insurance Company of New Jersey (AAA MAICNJ) (Hamilton, NJ). The ratings have been removed from under review with positive implications and assigned a stable outlook.
Concurrently, A.M. Best has affirmed the FSR of A+ (Superior) and ICRs of "aa-" of California State Auto Group (California State Auto) (Walnut Creek, CA) and its members. The outlook for all ratings is stable. (Please see below for a detailed listing of the companies.)
The rating actions follow the completion of the acquisitions and recent regulatory approvals from the respective Departments of Insurance adding Keystone, AAA MAIC and AAA MAICNJ into the California State Auto's intercompany pooling agreement, retroactive to January 1, 2011. As members of California State Auto, these companies will receive greater financial flexibility, additional access to capital, sophisticated pricing tools and improved technology systems. With the acquisitions, California State Auto acquires companies with similar American Automobile Association (AAA) brand-name recognition and additional market opportunities. California State Auto also improves its geographic diversification as these newly acquired companies are licensed in several northeast U.S. states.
The rating and outlook of California State Auto reflects its strong risk-adjusted capitalization, favorable operating earnings and significant personal lines market presence in its selected operating territories, specifically in California, where it ranks among the top five carriers in market share for private passenger auto and homeowners coverage. Furthermore, the group benefits from its long association with AAA Northern California, Nevada & Utah (formerly known as the California State Automobile Association), the Northern California, Nevada and Utah affiliate of the AAA, which enhances customer loyalty and affinity.
The FSR of A+ (Superior) and ICRs of "aa-" have been affirmed for the following members of California State Auto:
- AAA Northern California, Nevada & Utah Insurance Exchange
- Western United Insurance Company
- ACA Insurance Company
The FSR has been upgraded to A+ (Superior) and the ICRs have been upgraded to "aa-" for the following members of California State Auto:
- Keystone Insurance Company
- AAA Mid-Atlantic Insurance Company
- AAA Mid-Atlantic Insurance Company of New Jersey
A.M. Best also has withdrawn the FSR of B++ (Good) and ICR of "bbb" of AAA Mid-Atlantic Insurance Group (AAA MAIG) (Haverford, PA) and assigned an NR (Not Rated) to the FSR and the ICR. These withdrawals are due to the elimination of the AAA MAIG's pooling agreement, and as a result, the elimination of AAA MAIG.
The principal methodology used in determining these ratings is Best's Credit Rating Methodology - Global Life and Non-Life Insurance Edition, which provides a comprehensive explanation of A.M. Best's rating process and highlights the different rating criteria employed. Additional key criteria utilized include: "Risk Management and the Rating Process for Insurance Companies"; "Understanding BCAR for Property/Casualty Insurers"; and "Rating Members of Insurance Groups." Methodologies can be found at www.ambest.com/ratings/methodology.
Founded in 1899, A.M. Best Company is the world's oldest and most authoritative insurance rating and information source.