A.M. Best Downgrades Financial Strength Rating of American Family Insurance Group; Affirms Rating on Commercial Paper Program.Business Editors/Insurance Writers OLDWICK, N.J.--(BUSINESS WIRE)--Oct. 30, 2003 A.M. Best Co. has downgraded the financial strength rating to A (Excellent) from A+ (Superior) of the property/casualty affiliates of 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 (American Family American Family is a photographic artwork exhibition by Renée Cox. See also
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 AMB-1 rating of American Family 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. , Inc.'s commercial paper program. The outlook for these ratings is stable. The downgrade Downgrade A negative change in the rating of a security. Notes: For example, an analyst may downgrade a stock from strong buy to buy, or a bond rating agency may downgrade a bond from AAA to AA. of American Family reflects its surplus decline and substantial premium growth over several years, which caused the group's risk-adjusted capital to decline significantly over this period. In addition, the group's 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 have been volatile due to weather-related 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. losses and reduced investment income levels. The stable outlook reflects American Family's improved underwriting performance that, if sustained, will strengthen its overall capitalization. The downgrade of American Family Life reflects the impact of the rating change of the property/casualty group and the company's overall decline in risk-adjusted capital, driven by additional investments in common stocks and the volatility in net income. The A (Excellent) rating continues to recognize the strong marketing and distribution presence in the Midwest, good asset quality, favorable fa·vor·a·ble adj. 1. Advantageous; helpful: favorable winds. 2. Encouraging; propitious: a favorable diagnosis. 3. level of capitalization and the improvement in earnings from insurance operations. The group maintains a sound capital position at its current rating level and a well-established regional market presence as a leading personal lines insurer in the Midwest. The group operates in 17 states, primarily in the Midwest, and offers a broad range of products such as personal automobile, homeowners, farmowners, inland marine, commercial multi-peril, personal and commercial umbrella, fire and allied lines through its exclusive agency base of approximately 4,000. The financial strength rating of A (Excellent) applies to the following members of American Family Insurance Group: -- American Family Mutual Insurance Company -- American Family Insurance Company -- American Standard Insurance Company of OH -- American Standard Insurance Company of WI -- American Family Life Insurance Company The following debt rating has been affirmed: American Family Financial Services, Inc. -- -- AMB-1 on commercial paper program 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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