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FOR IMMEDIATE RELEASE
OLDWICK, N.J. - MARCH 12, 2010 12:00 AM (EST)
A.M. Best Co. has upgraded the financial strength rating to A- (Excellent) from B++ (Good) and issuer credit rating to "a-" from "bbb+" of American Freedom Insurance Company (American Freedom) (Arlington Heights, IL). The outlook for both ratings has been revised to stable from positive.
The ratings reflect American Freedom's excellent risk-adjusted capitalization, conservative underwriting leverage and favorable loss reserve development. The ratings also contemplate the company's continued operating profitability, which has benefited from favorable loss experience. The profitable performance is reflective of management's prudent underwriting, despite the highly competitive nonstandard automobile market and special compensation expense distributed to shareholders in recent years.
These strengths are partially offset by American Freedom's limited business profile. Due to its product and geographic concentration, the company remains susceptible to adverse changes in the judicial and legislative environment, as well as increased competition, which impacted premium growth prior to 2009.
For Best's Credit Ratings, an overview of the rating process and rating methodologies, please visit Best's Ratings & Analysis.
The principal methodologies used in determining these ratings, including any additional methodologies and factors that may have been considered, can be found at Best's Credit Rating Methodology.
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.