|[December 18, 2012]
A.M. Best Upgrades Issuer Credit Ratings of Members of Vermont Mutual Insurance Group
OLDWICK, N.J. --(Business Wire)--
A.M. Best Co. has upgraded the issuer credit ratings (ICR) to
"a+" from "a" and affirmed the financial strength rating of A
(Excellent) 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 is stable.
The upgrade of the ICRs reflects 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
Offsetting these positive rating factors is Vermont Mutual's business
concentration in the New England states, which exposes it to
weatherrelated events and competitive market conditions. However, the
company maintains a comprehensive reinsurance coverage program to
mitigate potential catastrophe losses.
Key drivers that could lead to future positive rating actions would be
Vermont Mutual producing an operating performance in line with its
historically strong results while maintaining its strong risk-adjusted
capital position. However, if frequent and severe weather events
continue to impact the company's geographical location, and/or other
market disruptions cause underwriting losses with a substantial negative
impact on risk-adjusted.
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. Key criteria
utilized include: "Risk Management and the Rating Process for Insurance
Companies"; "Catastrophe Analysis in A.M. Best Ratings"; "Understanding
BCAR for Property/Casualty Insurers"; and "Rating Members of Insurance
Groups." Best's Credit Rating Methodology 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. For more
information, visit www.ambest.com.
Copyright © 2012 by A.M. Best Company, Inc. ALL RIGHTS
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