Published: May 19, 2010
A.M. Best Upgrades Ratings of Forestry Mutual Insurance Company
OLDWICK, N.J. - (BUSINESS WIRE) - A.M. Best Co. has upgraded the financial strength rating to C++
(Marginal) from C+ (Marginal) and issuer credit rating to "b+" from "b-"
of Forestry Mutual Insurance Company (FMIC) (Raleigh, NC). The
outlook for both ratings has been revised to positive from stable.
The ratings reflect FMIC's increasing surplus and positive operating
results as well as its expertise in loss control and safety procedures
needed for the higher hazard risks the company insures. Additionally,
FMIC has benefited from management's initiatives taken in recent years
to re-underwrite the business, improve FMIC's geographic diversification
into neighboring states and to implement a zero tolerance for failure to
comply with safety requirements. The positive outlook reflects A.M.
Best's expectation that FMIC's operating performance and risk-adjusted
capitalization will continue to improve in the medium term.
These positive rating factors are somewhat offset by the company's
limited business profile as well as by market and economic conditions
that create unique challenges for a single line niche writer of workers'
compensation insurance for forestry and logging related risks. In
addition, while FMIC's performance has been negatively affected by an
increase in large claims, overall frequency levels have significantly
improved in recent years. With a lowering of FMIC's retention levels
during 2009 on its reinsurance program, it is better protected from
large losses; and thus, reduced volatility in earnings is expected in
the future. Also mitigating the increase in larger claims is the
effectiveness of FMIC's safety program and strong reserving practices.
For Best's Credit Ratings, an overview of the rating process and rating
methodologies, please visit www.ambest.com/ratings.
The principal methodologies used in determining these ratings, including
any additional methodologies and factors that may have been considered,
can be found at www.ambest.com/ratings/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. For more information, visit www.ambest.com.
A.M. Best Co.
Analysts
Scott Dodd,
908-439-2200, ext. 5582
scott.dodd@ambest.com
or
Gerard
Altonji, 908-439-2200, ext. 5626
gerard.altonji@ambest.com
or
Public
Relations
Rachelle Morrow, 908-439-2200, ext. 5378
rachelle.morrow@ambest.com
or
Jim
Peavy, 908-439-2200, ext. 5644
james.peavy@ambest.com
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