A.M. Best Upgrades Ratings of Forestry Mutual Insurance Company

OLDWICK, N.J.--(BUSINESS WIRE)-- A.M. Besthas upgraded the financial strength rating to B+ (Good) from B (Fair) and the issuer credit rating to “bbb-” from “bb+” of Forestry Mutual Insurance Company(FMIC) (Raleigh, NC). The outlook for both ratings remains positive.

The upgrade reflects FMIC’s significant improvement in recent years in underwriting and operating results, as well as positive underwriting cash flows. FMIC continues to benefit from geographic diversification entering markets in neighboring states, management initiatives taken in recent years to restructure its reinsurance program to reduce net loss ratio volatility, non-renewal of unprofitable accounts and the implementation of a zero-tolerance policy for failure to comply with safety requirements. The outlook reflects A.M. Best’s expectation of positive rating movement in the long term if FMIC’s results continue to improve. While FMIC is well- positioned at its current rating level, negative rating actions could occur if earnings were to decline and/or capitalization levels were to materially deteriorate.

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:

• Risk Management and the Rating Process for Insurance Companies

• The Treatment of Terrorism Risk in the Rating Evaluation

• Understanding BCAR for Property/Casualty Insurers

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. For more information, visit www.ambest.com.

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A.M. Best Company

Victoria Riggs

Financial Analyst

908-439-2200, ext. 5039

[email protected]

or

Christopher Sharkey

Manager, Public Relations

908-439-2200, ext. 5159

[email protected]

or

Gerard Altonji

Assistant Vice President

908-439-2200, ext. 5626

[email protected]

or

Jim Peavy

Assistant Vice President, Public Relations

908-439-2200, ext. 5644

[email protected]

Source: A.M. Best Company