A.M. Best Affirms Ratings of American Modern and Assigns Issuer Credit Ratings.OLDWICK, N.J. -- A.M. Best Co. has affirmed the financial strength rating of A+ (Superior) of American Modern American Modern was a distinct American design aesthetic formed in the period between 1925 and World War II. American Modern was created by a pioneering group of designers, architects and artists, among them were Norman Bel Geddes, Donald Deskey, Henry Dreyfuss, Paul Frankl, Insurance Group (American Modern) and its property/casualty affiliates. A.M. Best has also affirmed the financial strength rating of A- (Excellent) of American Modern's life/health affiliate. Concurrently, A.M. Best has affirmed the issuer credit rating (ICR (Intelligent Character Recognition or Image Character Recognition) The machine recognition of hand-printed characters as well as machine printing that is difficult to recognize. ) of "a-" and debt ratings of "a-" on senior debt, "bbb+" on subordinated debt Subordinated Debt A loan (or security) that ranks below other loans (or securities) with regard to claims on assets or earnings. Also known as "junior security" or "subordinated loan". and "bbb" on preferred stock Stock shares that have preferential rights to dividends or to amounts distributable on liquidation, or to both, ahead of common shareholders. Preferred stock is given preference over common stock. Holders of preferred stock receive dividends at a fixed annual rate. to the $150 million shelf registration filed by American Modern's parent, The Midland Company (Midland) (NASDAQ NASDAQ in full National Association of Securities Dealers Automated Quotations U.S. market for over-the-counter securities. Established in 1971 by the National Association of Securities Dealers (NASD), NASDAQ is an automated quotation system that reports on : MLAN (Music LAN) A local area network based on FireWire that is used to transport audio, video and MIDI data. As music has evolved into the digital realm, mLAN is designed to replace the myriad of cables, plugs and "in," "out" and "through" sockets on synthesizers, mixers and ). Additionally, A.M. Best has assigned ICRs of "aa-" to American Modern and its property/casualty affiliates and "a-" to its life/health affiliate. All companies are located in Amelia, OH. All ratings have a stable outlook. The property/casualty ratings reflect American Modern's superior capitalization, favorable operating performance and niche strategy in providing insurance products for manufactured housing Manufactured housing (also known as prefab housing) is a type of housing unit that is largely assembled in factories and then transported to sites of use. In the United States, the term "manufactured home" specifically refers to a house built entirely in a protected , motor sport vehicles and financial services The examples and perspective in this article or section may not represent a worldwide view of the subject. Please [ improve this article] or discuss the issue on the talk page. products. The group continues to maintain a strong surplus position given the short-tail property focus and low volatility in loss reserves. Management has improved 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. results in several key specialty product lines by re-underwriting, rate increases, product redesigns and automation. This has led to pre-tax returns on revenue and equity that compare favorably to the property lines industry composite. The ratings also acknowledge the modest financial leverage of Midland with total debt-to-adjusted capitalization of approximately 19% and fixed coverage ratios of approximately nine times. Partially offsetting these positive rating factors is the group's elevated premium leverage and above average expense levels in relation to the property lines industry composite. Elevated premium leverage is a result of moderate exposure growth and dividends to Midland. Expense levels are primarily attributable to the group's competitive commission structure, particularly in terms of its profitability-based incentives. American Modern and its property/casualty affiliates also continue to have approximately 50% of their premium writings in the manufactured housing segment and therefore, exposing them to catastrophe losses. However, strict adherence to underwriting guidelines and a continued extensive reinsurance The contract made between an insurance company and a third party to protect the insurance company from losses. The contract provides for the third party to pay for the loss sustained by the insurance company when the company makes a payment on the original contract. program have reduced the potential exposure to severe shock losses. The rating of American Modern's life/health affiliate is based on a positive statutory operating earnings Operating Earnings Profits after subtracting expenses such as marketing, cost of goods sold, administration and general operating costs from revenue. Notes: Tax and interest expenses are not subtracted - operating earnings are synonymous with EBIT (earnings before trend, a high credit-quality investment portfolio and favorable risk-adjusted capitalization. This rating also recognizes the life/health affiliate's strategic position within the American Modern Insurance Group and Midland's financial support of the life/health operation. The financial strength rating of A+ (Superior) has been affirmed and issuer credit ratings of "aa-" have been assigned to American Modern Insurance Group and its following property/casualty affiliates: --American Modern Home Insurance Company --American Family Home Insurance Company --American Southern Home Insurance Company --American Western Home Insurance Company --G.U.I.C. Insurance Company --American Modern Lloyds Insurance Company The financial strength rating of A- (Excellent) has been affirmed and an issuer credit rating of "a-" has been assigned to the life/health affiliate of American Modern Insurance Group, American Modern Life Insurance Company. The issuer credit rating of "a-' has been affirmed for The Midland Company. The following debt ratings have been affirmed under the $150 million shelf registration: The Midland Company-- --"a-" on senior unsecured --"bbb+" on subordinated --"bbb" on preferred stock For Best's Debt Ratings, all other Best's Ratings Best's rating A rating A.M. Best Co. assigns to insurance companies based on the company's ability to meet its obligations to its policyholders. , an overview of the rating process and rating methodologies, please visit http://www.ambest.com/ratings. For current Best's Ratings, independent data and analysis on more than 3,000 individual property/casualty companies, groups and industry composites, please visit http://www.ambest.com/pc. 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 http://www.ambest.com. |
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