A.M. Best Comments on Credit Ratings of Employers Mutual Casualty Company and Its Subsidiaries

By a News Reporter-Staff News Editor at Insurance Weekly News -- A.M. Best has commented that the Financial Strength Rating (FSR) of A (Excellent) and the Long-Term Issuer Credit Rating (Long-Term ICR) of "a+" of Employers Mutual Casualty Company (EMCC) (Des Moines, IA) and its five property/casualty (P/C) subsidiaries (collectively referred to as EMC Insurance Companies) remain unchanged following the announcement that EMCC has submitted a proposal to acquire all outstanding shares of EMC Insurance Group Inc. (EMCI). In addition, the FSR of A (Excellent) and the Long-Term ICR of "a" of EMCC's separately rated, indirectly owned subsidiary, EMC Reinsurance Company (Des Moines, IA), also remain unchanged. The outlook of these Credit Ratings (ratings) remains stable.

EMCC owns approximately 55% of EMCI's common stock, and has submitted a proposal to acquire the outstanding common stock for $30 per share in cash. While the proposal is being considered by a special committee of EMCI's board of directors, business will continue as usual for EMC Insurance Companies. If the proposed transaction is eventually approved by EMCI's special committee and shareholders, it should have no impact on the operations of EMC Insurance Companies.

A.M. Best has determined that, although capital at EMC Insurance Companies will decline slightly as a result of the proposed transaction, due to the payment of cash to minority shareholders, the overall group's balance sheet strength will remain at the strongest level as measured by Best's Credit Rating Methodology.

(Our reports deliver fact-based news of research and discoveries from around the world.)