A.M. Best Affirms Ratings of FM Insurance Company Limited

LONDON--(BUSINESS WIRE)-- A.M. Best Europe – Rating Services Limited has affirmed the financial strength rating of A+ (Superior) and issuer credit rating of “aa” of FM Insurance Company Limited (FMI) (United Kingdom). The outlook for both ratings remains stable.

The affirmation of the ratings reflects FMI’s excellent stand-alone risk-adjusted capitalisation, as well as explicit and implicit support from its parent,Factory Mutual Insurance Company and the wider FM Global Group, in particular in the form of reinsurance and a policy level financial guarantee. FMI also has a history of receiving additional capital from its parent, when required, most recently in the form of a GBP 30 million capital injection in 2011.

FMI’s prospective performance is subject to volatility from its exposure to high severity low frequency losses. The high proportion of its investment portfolio allocated to equities also is a source of potential volatility. Performance has been weak in recent years, reflecting primarily a high level of large risk and natural catastrophe losses, and the company has reported losses before tax in three of the last five years.

Through its membership in the FM Global Group, FMI has a distinctive business profile as a leading insurer of highly protected risks within the commercial property market. FMI is an important part of the FM Global Group as it serves the group’s clients outside of North America. FM Global Group’s competitive position in its core markets is supported by the professional property engineering expertise and loss prevention services it provides to its clients.

A change in the ratings of FMI’s parent is likely to lead to a change in FMI’s ratings. In addition, a decline in the support received from the parent could have a negative impact on FMI’s ratings.

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 utilised include: “Risk Management and the Rating Process for Insurance Companies”; “Understanding BCAR for Property/Casualty Insurers”; “Understanding Universal BCAR”; “Catastrophe Analysis in A.M. Best Ratings”; and “Rating Members of Insurance Groups”. Best’s Credit Rating Methodology can be found at www.ambest.com/ratings/methodology.

In accordance with Regulation (EC) No. 1060/2009, the following is a link to required disclosures: A.M. Best Europe - Rating Services Limited Supplementary Disclosure.

A.M. Best Europe – Rating Services Limited is a subsidiary of A.M. Best Company.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.

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A.M. Best Company
Mathilde Jakobsen, + (44) 20 7397 0266
Senior Financial Analyst
[email protected]
or
Catherine Thomas, +(44) 20 7397 0281
Director, Analytics
[email protected]
or
Rachelle Morrow, +(1) 908-439-2200, ext. 5378
Senior Manager, Public Relations
[email protected]
or
Jim Peavy,+(1) 908-439-2200, ext. 5644
Assistant Vice President, Public Relations
[email protected]

Source: A.M. Best Europe – Rating Services Limited