A.M. Best Affirms Ratings of Erie Insurance Group, Erie Family Life Insurance Company and Erie Indemnity Company.OLDWICK, N.J. -- A.M. Best Co. has affirmed the financial strength rating (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+ (Superior) 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 "aa-" of 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. (Erie) and its property/casualty members. Concurrently, A.M. Best has affirmed the ICR of "a+" of 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), Erie's publicly-traded management company. Additionally, A.M. Best has affirmed the FSR of A (Excellent) and ICR of "a" of Erie's life affiliate, Erie Family Life Insurance Company (Erie Family Life). All companies are domiciled dom·i·cile n. 1. A residence; a home. 2. One's legal residence. v. dom·i·ciled, dom·i·cil·ing, dom·i·ciles v.tr. 1. in Erie, PA, with the exception of Erie Insurance Company of New York New York, state, United States New York, Middle Atlantic state of the United States. It is bordered by Vermont, Massachusetts, Connecticut, and the Atlantic Ocean (E), New Jersey and Pennsylvania (S), Lakes Erie and Ontario and the Canadian province of , which is domiciled in New York State. The outlook for all ratings is stable. (See below for a detailed list of the companies and ratings.) The rating affirmations reflect Erie's consistently superior risk-adjusted capitalization, strong long-term operating performance and well-established regional market presence. The group benefits from the strength of its balance sheet, its high service reputation and agency partnering approach, which helps to strengthen agency loyalty. A.M. Best believes that Erie maintains prudent risk management capabilities and continues to enhance its effective enterprise risk management process, which identifies, measures and monitors existing and emerging risks. Somewhat offsetting these positive rating attributes are Erie's geographic business concentration, which subjects its earnings to natural and man-made catastrophe losses. As part of its catastrophe management process, Erie utilizes catastrophe modeling
The ICR affirmation of Erie Indemnity recognizes its sound financial position despite recent surplus declines attributed to reduced income from management operations and investment losses related to the recent downturn in the financial markets. Erie Indemnity is dependent upon management fees paid by Erie Insurance Exchange (Exchange), which represents its principal source of revenue. Furthermore, Erie Indemnity is subject to credit risk related to unsecured receivables due from the Exchange for certain fees, costs and reimbursements. Erie Indemnity serves as attorney-in-fact for the insurance operations with nearly $792 million 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 as of March 2009. The affirmation of Erie Family Life's ratings acknowledges the integral position within Erie as evidenced by a substantial cash contribution to Erie Family Life made in 2009, consistent positive statutory operating results and favorable level of risk-adjusted capitalization based on Best's Capital Adequacy Ratio Capital adequacy ratio (CAR), also called Capital to Risk (Weighted) Assets Ratio (CRAR)[], is a ratio of a bank's capital to its risk. National regulators track a bank's CAR to ensure that it can absorb a reasonable amount of loss. . Partially offsetting these positive rating factors are Erie Family Life's large exposure to interest-sensitive fixed annuities Fixed annuities Contracts in which an insurance company or issuing financial institution pays a fixed dollar amount of money per period. and the recent sizable capital losses from its investment portfolio. The FSR of A+ (Superior) and ICRs of "aa-" have been affirmed for Erie Insurance Group and its following property/casualty members: * Erie Insurance Exchange * Erie Insurance Company * Erie Insurance Company of New York * Erie Insurance Property & Casualty Company * Flagship City Insurance Company For Best's Credit Ratings, an overview of the rating process and rating methodologies, please visit www.ambest.com/ratings. The principal methodologies used in determining these ratings, including any additional methodologies and factors that may have been considered, can be found at www.ambest.com/ratings/methodology. Founded in 1899, A.M. Best Company is a global full-service credit rating organization dedicated to serving the financial and health care service industries, including insurance companies, banks, hospitals and health care system providers. For more information, visit www.ambest.com. |
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