A.M. Best Affirms Ratings of EMC Insurance Companies and EMC Reinsurance Company.OLDWICK, N.J. -- A.M. Best Co. has affirmed the financial strength ratings (FSR (Free System Resource) In Windows 3.x, the amount of unused memory in various 64K blocks reserved for managing current applications. Every open window takes some space in this area. See Windows memory limitation. ) of A- (Excellent) and issuer credit ratings (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-" of EMC (1) (EMC Corporation, Hopkinton, MA, www.emc.com) The leading supplier of storage products for midrange computers and mainframes. Founded in 1979 by Richard J. Egan and Roger Marino, EMC has developed advanced storage and retrieval technologies for the world's largest companies. Insurance Companies (EMC) and its property/casualty pool members, as well as EMC 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. Company (EMC Re) (Des Moines Des Moines, city, United States Des Moines (dĭ moin`), city (1990 pop. 193,187), state capital and seat of Polk co., S central Iowa, at the junction of the Des Moines and Raccoon rivers; inc. , IA). The outlook for all ratings is stable. (See below for a detailed list of the ratings.) The affirmation of EMC's ratings reflects its strong capitalization, improved profitability in 2005 and the first quarter of 2006 and the continued benefits derived from management's re-underwriting and pricing initiatives over the past several years. These factors are supported by EMC's extensive regional branch office network, long-standing agency relationships and the relatively favorable operating environment In computing, an operating environment is the environment in which users run programs, whether in a command line interface, such as in MS-DOS or the Unix shell, or in a graphical user interface, such as in the Macintosh operating system. in the Midwest and South, where the majority of its business is generated. Partially offsetting these positive rating factors is the group's significant earnings variability earnings variability Fluctuations in a corporation's net income or earnings per share during a given period. Past earnings variability is generally considered undesirable because it makes investors less certain of future earnings per share and dividends. in recent years--largely due to adverse prior year loss reserve development--and above average common stock leverage, which has resulted in sizable swings in capital gains. Management attributes much of the group's significant reserve development in 2004 to aggressive actions taken on individual case reserves as a result of diligent and extensive claim file review and better communication between branch offices and the home office. The group's reserves appear to have stabilized to a large degree as evidenced by its reported favorable reserve development and improved profitability in 2005 and the first quarter of 2006. The affirmation of EMC Re's ratings acknowledges its substantially improved capitalization and operating performance over the past several years, its role and strategic importance as a focused reinsurer re·in·sure 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. within the EMC group and the continued financial and operational support provided by its ultimate parent, Employers Mutual Casualty Company (EMCC EMCC See Emerging Markets Clearing Corporation (EMCC). ) (Iowa), the lead company within the EMC pool. These factors are partially offset by EMC Re's significance dependence on EMCC and the competitive challenges associated with its position in the broker reinsurance market, which is generally comprised of large professional reinsurers who heavily influence reinsurance pricing, terms and conditions. The FSRs of A- (Excellent) and the ICRs of "a-" have been affirmed for EMC Insurance Companies and its following property/casualty pool members: --Employers Mutual Casualty Company --EMCASCO Insurance Company --Illinois EMCASCO Insurance Company --Dakota Fire Insurance Company --Hamilton Mutual Insurance Company --EMC Property and Casualty Company --Union Insurance Company of Providence --Farm and City Insurance Company For Best's Ratings, an overview of the rating process and rating methodologies, please visit www.ambest.com/ratings. 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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