A.M. Best Affirms Ratings of Erie's Property and Casualty Companies and Erie Family Life; Assigns Issuer Credit Ratings.OLDWICK, N.J. -- A.M. Best Co. has affirmed the financial strength rating of A+ (Superior) of Erie Insurance Group's property and casualty companies (Erie), which are managed by its publicly-traded company, Erie Indemnity Company (Erie Indemnity) (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 : ERIE). Additionally, A.M. Best has affirmed the financial strength rating of A (Excellent) of Erie's life affiliate, Erie Family Life Insurance Company (Erie Family Life) (OTC OTC See: Over-the-counter. OTC See over-the-counter market (OTC). BB: ERIF ERIF Electricity Rent Inclusion Factor (office rental space lease) ERIF Embedded Routing Information Field ) (all of Erie, PA). Concurrently, A.M. Best has assigned 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 "aa-" to Erie's property/casualty affiliates and has assigned an ICR of "a" to Erie Family Life. A.M. Best has also assigned an ICR of "a-" to Erie Indemnity. All ratings have a stable outlook. The rating affirmation of Erie reflects its strong risk-adjusted capitalization, its competitive position in the independent agency channel and favorable business profile. The stable outlook reflects numerous strategic initiatives to improve operating results as reflected by management's continued focus on underwriting discipline and profitability as well as quality growth. Additionally, Erie's capital position is favorably impacted by the financial position of Erie Indemnity, which as of year-end 2004 had over $1 billion in shareholders' equity Shareholders' Equity A firms' total assets minus its total liabilities. Equivalently, it is share capital plus retained earnings minus treasury shares. Shareholders' equity is the amount by which a company is financed through common and preferred shares. and no long-term debt Long-Term Debt Loans and financial obligations lasting over one year. Notes: For example debts obligations such as bonds and notes which have maturities greater than one year would be considered long-term debt. obligations. Erie maintains a strong market presence reflective of its reputation for excellent customer service and extensive local market knowledge. This combination enables the group to record overall renewal retention ratios of slightly less than 90% across most lines of business. In recent years, Erie furthered its market presence and geographic risk Geographic risk Risk that arises when an issuer issues policies concentrated within certain geographic areas, such as the risk of damage from a hurricane or an earthquake. dispersion by cautiously expanding beyond Pennsylvania to over 11 states and the District of Columbia District of Columbia, federal district (2000 pop. 572,059, a 5.7% decrease in population since the 1990 census), 69 sq mi (179 sq km), on the east bank of the Potomac River, coextensive with the city of Washington, D.C. (the capital of the United States). . Prior year declines in underwriting experience were attributed to inadequate rates, increased loss cost trends and weather-related events. In recent years, improved operating results have been reflective of significant rate actions, overall firm market conditions, reduced catastrophe losses, greater risk segmentation, as well as a steady stream of investment earnings. The affirmation of Erie Family Life's rating reflects the competitive advantage it derives from Erie's favorable property/casualty regional business, 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 and a favorable level of risk-adjusted capitalization. This rating also recognizes Erie Family Life's integral position within Erie and Erie's demonstrated financial support for the life company. The financial strength rating of A+ (Superior) has been affirmed, and issuer credit ratings of "aa-" have been assigned to Erie Insurance Group Erie Insurance Group, (NASDAQ: ERIE) is a multi-line insurance company, offering auto, home, commercial and life insurance through a network of independent insurance agents. and its following property/casualty affiliates: --Erie Insurance Exchange --Erie Insurance Company --Erie Insurance Company of New York --Erie Insurance Property & Casualty Company --Flagship City Insurance Company The financial strength rating of A (Excellent) has been affirmed and an issuer credit rating of "a" has been assigned to Erie Family Life Insurance Company. An issuer credit rating of "a-" has been assigned to Erie Indemnity Company. For Best's Ratings, 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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