A.M. Best Affirms Rating of American Family.Business Editors OLDWICK, N.J.--(BUSINESS WIRE)--Nov. 7, 2001 A.M. Best Co. has affirmed af·firm v. af·firmed, af·firm·ing, af·firms v.tr. 1. To declare positively or firmly; maintain to be true. 2. To support or uphold the validity of; confirm. v.intr. the financial strength rating of A+ (Superior) for American Family Insurance American Family Insurance Group (aka "AmFam") is a private mutual company which focuses on property, casualty and auto insurance, but also offers commercial insurance, life, health, and homeowners coverage, as well as investment and retirement-planning products. Group, Madison, Wisconsin Madison is the capital of the U.S. state of Wisconsin and the county seat of Dane County. It is also home to the University of Wisconsin–Madison. The 2006 population estimate of Madison was 223,389, making it the second largest city in Wisconsin, after Milwaukee, and , with a negative outlook. The rating applies to the group's lead company, American Family American Family is a photographic artwork exhibition by Renée Cox. See also
tr.v. re·in·sured, re·in·sur·ing, re·in·sures To insure again, especially by transferring all or part of the risk in a contract to a new contract with another insurance company. with the lead company. The rating affirmation reflects the group's outstanding capitalization capitalization n. 1) the act of counting anticipated earnings and expenses as capital assets (property, equipment, fixtures) for accounting purposes. 2) the amount of anticipated net earnings which hypothetically can be used for conversion into capital assets. , well-established regional market presence, as well as the depth and experience of its management team. These positive rating factors are derived from American Family's conservative operating philosophy, competitive expense structure and effective captive agency distribution network. Also, the rating acknowledges management's prudent operating fundamentals which are evidenced by a moderate underwriting Underwriting 1. The process by which investment bankers raise investment capital from investors on behalf of corporations and governments that are issuing securities (both equity and debt). 2. The process of issuing insurance policies. leverage, a high-quality investment portfolio and conservative reserving practices. The negative outlook on the rating is due to marked deterioration de·te·ri·o·ra·tion n. The process or condition of becoming worse. in profitability and return measures over recent years. Geographically concentrated in the Midwest, American Family's results have been negatively impacted by severe losses from wind/hail and winter storm activity producing poor underwriting results. Despite the negative rating pressure, American Family has maintained its "Superior" rating status due to its excellent capital position, as well as the strategic initiatives put in place by management. This analysis acknowledges the extensive steps already undertaken by American Family, which management believes will return it to historic levels of operating profitability. Nevertheless, A.M. Best believes the results will continue to be exposed to operating volatility in the near-term due to American Family's concentration of risk in the Midwest, the costs associated with geographic expansion and the competitive pricing environment in the group's core operating states. In addition, the A+ (Superior) rating of American Family Life Insurance Company (AFLIC) has been affirmed with a negative outlook. AFLIC distributes life insurance and annuity products through the exclusive multi-line career agency system of American Family Mutual. AFLIC also benefits from the financial strength and market presence of its parent. However, the operating volatility of American Family Mutual's property and casualty business has placed downward rating pressure on the group as a whole. A.M. Best Co., established in 1899, is the world's oldest and most authoritative insurance rating and information source. For more information, visit A.M. Best's Web site at www.ambest.com. |
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