A.M. Best Revises Issuer Credit Rating Outlook to Stable for New Jersey Manufacturers Insurance Company

OLDWICK, N.J.--(BUSINESS WIRE)-- A.M. Best has revised the outlook to stable from negative for the Long-Term Issuer Credit Rating (Long-Term ICR) and affirmed the Financial Strength Rating (FSR) of A+ (Superior) and the Long-Term ICR of “aa” of New Jersey Manufacturers Insurance Company (NJM). The outlook for the FSR remains stable. Concurrently, A.M. Best has downgraded the FSR to A (Excellent) from A+ (Superior) and the Long-Term ICR to “a” from “aa-” of NJM’s wholly owned subsidiary, New Jersey Re-Insurance Company (NJRe). In addition, A.M. Best has affirmed the FSR of A (Excellent) and the Long-Term ICRs of “a” of NJM’s two other subsidiary companies, New Jersey Casualty Insurance Company (NJC) and New Jersey Indemnity Insurance Company (NJI). The outlook of these Credit Ratings (ratings) remains stable. All companies are headquartered in West Trenton, NJ.

The ratings of NJM reflect its balance sheet strength, which A.M. Best categorizes as strongest, as well as its strong operating performance, favorable business profile and appropriate enterprise risk management.

The Long-Term ICR outlook revision and ratings reflect NJM’s strong risk-adjusted capitalization and improved operating performance in recent years. These positive rating factors are derived from management’s conservative operating philosophy, exceptional customer service, and strong local market presence and expertise. NJM’s direct marketing approach and efficient cost structure have consistently produced low underwriting expense ratios. This expense advantage has enabled NJM to provide significant policyholder dividends while maintaining strong risk-adjusted capitalization. In addition, these policyholder dividend payments have considerably enhanced customer loyalty, resulting in superior business persistency. NJM’s statewide market position is augmented by its extensive workers’ compensation managed-care capabilities, its own preferred provider network and reputation for providing quality service.

The ratings of NJRe reflect its strong risk-adjusted capitalization, but acknowledge that it does not currently operate a core function within the group following the recent migration of certain policies to NJM. NJRe plans to continue writing certain direct lines of business as an accommodation to NJM.

The ratings of NJC and NJI recognize each company’s strong risk-adjusted capitalization and positions as residual writers for the workers’ compensation and auto markets of NJM, respectively. The ratings also acknowledge the common management and infrastructure shared with NJM. Factors that may lead to negative rating action include a material decline in NJM’s operating results or capitalization levels that fall below A.M. Best’s expectation for the current rating level. Negative rating action could potentially be taken on NJM’s subsidiaries if there is a rating change for the parent company or a change in the level of implicit and explicit support these entities receive from NJM.

This press release relates to Credit Ratings 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 see A.M. Best’s Recent Rating Activity web page. For additional information regarding the use and limitations of Credit Rating opinions, please view Understanding Best’s Credit Ratings. For information on the proper media use of Best’s Credit Ratings and A.M. Best press releases, please view Guide for Media - Proper Use of Best’s Credit Ratings and A.M. Best Rating Action Press Releases.

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A.M. Best

Michael T. Venezia, +1 908-439-2200, ext. 5034

Senior Financial Analyst

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Jacqalene Lentz, CPA, +1 908-439-2200, ext. 5762

Director

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Christopher Sharkey, +1 908-439-2200, ext. 5159

Manager, Public Relations

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Jim Peavy, +1 908-439-2200, ext. 5644

Director, Public Relations

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Source: A.M. Best Rating Services, Inc.