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FOR IMMEDIATE RELEASE
LONDON - DECEMBER 04, 2014 10:17 AM (EST)
A.M. Best has upgraded the financial strength rating to A+ (Superior) from A (Excellent) and the issuer credit ratings to "aa-" from "a+" of Vermont Mutual Insurance Company (Vermont Mutual) and its two fully reinsured subsidiaries, Northern Security Insurance Company, Inc. and Granite Mutual Insurance Company. These companies are members of Vermont Mutual Insurance Group and are all domiciled in Montpelier, VT. The outlook for all ratings has been revised to stable from positive.
The rating actions reflect Vermont Mutual's favorable underwriting and operating results, which have consistently outperformed the industry composite in recent years. In addition, Vermont Mutual continues to maintain solid risk-adjusted capitalization, a well-established market presence in the New England states and knowledge of local insurance issues.
Partially offsetting these positive rating factors is Vermont Mutual's business concentration in the New England states, which exposes it to weather-related events and competitive market conditions. However, the company maintains a comprehensive reinsurance coverage program to mitigate potential catastrophe losses.
A.M. Best believes that Vermont Mutual's ratings are well-positioned at their current rating levels. Factors that could lead to negative rating actions include deterioration in the group's underwriting and operating performance to a level below its peers and an erosion of surplus that causes a decline in risk-adjusted capital to a level no longer supportive of the group's current rating.
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:
This press release relates to rating(s) 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 visit A.M. Best's Ratings & Criteria Center.
A.M. Best Company is the world's oldest and most authoritative insurance rating and information source.