A.M. Best Upgrades Issuer Credit Rating of Atlantic Casualty Insurance Company; Affirms Credit Ratings of Auto-Owners Insurance Company

OLDWICK, N.J.--(BUSINESS WIRE)-- A.M. Best has upgraded the Long-Term Issuer Credit Rating (Long-Term ICR) to “a+” from “a” and affirmed the Financial Strength Rating (FSR) of A (Excellent) of Atlantic Casualty Insurance Company (Atlantic Casualty) (Goldsboro, NC). Concurrently, A.M. Best has affirmed the FSR of A++ (Superior) and the Long-Term ICR of “aa+” of Auto-Owners Insurance Company (Auto-Owners) and its four wholly owned property casualty companies that comprise Auto-Owners Insurance Group (AOIG). (See below for a detailed list.) In addition, A.M. Best has affirmed the FSR of A+ (Superior) and the Long-Term ICR of “aa-” of Auto-Owners Life Insurance Company (AOLIC), also a wholly owned subsidiary of Auto-Owners. The outlook for all of these Credit Ratings (ratings) is stable. All of the companies are domiciled in Lansing, MI unless otherwise noted.

The upgrade of Atlantic Casualty’s Long-Term ICR reflects the increased level of integration and the additional financial and operational support that it has received from Auto-Owners, which acquired the company in early 2016. Since the acquisition, Auto-Owners has increasingly supported Atlantic Casualty in various functions including, but not limited to: actuarial services, product development, reinsurance, claims, marketing and information technology. The ratings also reflect Atlantic Casualty’s excellent risk-adjusted capitalization and improved operating performance, especially over the last three years.

The ratings of AOIG reflect its superior capitalization, solid underwriting and operating performance over the last five years, experienced management team and a strong enterprise risk management program. AOIG also maintains a business profile that is nicely balanced between personal and commercial lines and property and casualty business. Through its acquisition of Atlantic Casualty in 2016 and its affiliation with Concord General Mutual Insurance Company in 2017, Auto-Owners has further broadened its business profile from both a product and geographic perspective. These positive rating factors are partially offset by the execution risk associated with these recent endeavors and its exposure to rising retentions and credit risk associated with the Michigan Catastrophic Claims Association.

The ratings of AOLIC reflect the support it receives from the Auto-Owners Mutual enterprise. In addition, AOLIC maintains strong risk-adjusted capitalization, good quality of capital and stable earnings trends. Partially mitigating factors include a high percentage of interest-sensitive liabilities, exposure to spread compression risks and a regional business profile.

The FSR of A++ (Superior) and the Long-Term ICRs of “aa+” have been affirmed, each with a stable outlook, for Auto-Owners Insurance Company and its wholly owned subsidiaries:

• Home-Owners Insurance Company
• Owners Insurance Company
• Property-Owners Insurance Company
• Southern-Owners Insurance Company

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.

A.M. Best 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

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Senior Director – P/C

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Frank Walko, +1-908-439-2200, ext. 5072

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

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Source: A.M. Best