AM Best Upgrades Issuer Credit Ratings of Grinnell Mutual Reinsurance Company and Its Subsidiary

Business Wire

OLDWICK, N.J.--(BUSINESS WIRE)-- AM 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 Grinnell Mutual Reinsurance Company and its subsidiary, Grinnell Select Insurance Company (both domiciled in Grinnell, IA), which are collectively referred to as Grinnell Mutual Group (Grinnell). The outlook of the Long-Term ICR has been revised to stable from positive while the outlook for the FSR remains stable.

The ratings reflect Grinnell’s balance sheet strength, which AM Best categorizes as strongest, as well as its adequate operating performance, neutral business profile and appropriate enterprise risk management (ERM).

The upgrade of the Long-Term ICR reflects Grinnell’s consistent and stable operating performance over the past five years. The group’s five-year average combined and operating ratios compare favorably to the personal lines composite. Grinnell has taken steps to improve its underwriting profitability for its direct and assumed books of business and actively continues to monitor pricing.

Grinnell’s balance sheet strength level reflects the group’s strongest level of overall risk-adjusted capitalization, conservative investment portfolio, favorable liquidity and prudent reserving practices. The group has generated surplus in each of the past five years, resulting in reduced net and gross underwriting leverage measures. Grinnell’s adequate operating performance reflects the group’s improved underwriting profitability, which when coupled with steady net investment income has resulted in positive pre-tax operating income and net income in each of the past five years. Grinnell’s business profile is neutral, supported by its mix of personal lines, commercial lines, assumed reinsurance business and its solid foothold in the farm property reinsurance market. However, Grinnell’s geographic concentration in the Midwest creates susceptibility to frequent and severe weather-related events. Grinnell’s ERM is appropriate for its size and scope as a regional (re)insurance organization. The group maintains a strong governance process and formalized risk management program, which is used to identify, prioritize, and manage material risks to the group’s business objectives.

This press release relates to Credit Ratings that have been published on AM 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 AM 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 AM Best press releases, please view Guide for Media - Proper Use of Best’s Credit Ratings and AM Best Rating Action Press Releases.

AM Best is a global rating agency and information provider with a unique focus on the insurance industry. Visit www.ambest.com for more information.

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Bob Skrabal

Financial Analyst

+1 908 439 2200, ext. 5792

bob.skrabal@ambest.com

Christopher Sharkey

Manager, Public Relations

+1 908 439 2200, ext. 5159

christopher.sharkey@ambest.com

Joseph Burtone

Director

+1 908 439 2200, ext. 5125

joseph.burtone@ambest.com

Jim Peavy

Director, Public Relations

+1 908 439 2200, ext. 5644

james.peavy@ambest.com