A.M. Best Upgrades Commerce Group.Business Editors OLDWICK, N.J.--(BUSINESS WIRE)--Jan. 20, 2000 A.M. Best Co. has upgraded the Commerce Group Inc., Webster, Mass., to A+ (Superior) from A (Excellent). The rating reflects the group's capitalization capitalization n. 1) the act of counting anticipated earnings and expenses as capital assets (property, equipment, fixtures) for accounting purposes. 2) the amount of anticipated net earnings which hypothetically can be used for conversion into capital assets. , operating performance and market presence in Massachusetts. These factors are derived from the group's conservative operating strategy, 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. guidelines guidelines, n.pl a set of standards, criteria, or specifications to be used or followed in the performance of certain tasks. and agency relations. As the leading writer of personal lines business in Massachusetts, Commerce Group benefits from name recognition, a large underwriting database and market knowledge. With the Jan. 29, 1999 acquisition of American Commerce Insurance Co., Columbus, Ohio Columbus is the capital and the largest city of the American state of Ohio. Named for explorer Christopher Columbus, the city was founded in 1812 at the confluence of the Scioto and Olentangy rivers, and assumed the functions of state capital in 1816. , management has accelerated its plans to expand outside Massachusetts. Concurrently, Commerce Group has enhanced its affiliation with Automobile Association Automobile Association may refer to:
adj. 1. Advantageous; helpful: favorable winds. 2. Encouraging; propitious: a favorable diagnosis. 3. loss characteristics. The rating also recognizes the financial flexibility afforded by the group's publicly traded holding company, the Commerce Group, Inc. Offsetting these positive factors are the group's geographic concentration and limited product scope, which is heavily focused on personal automobile. As a result, Commerce Group has been subject to the extremely competitive and highly regulated Massachusetts personal auto market, which has been characterized by aggressive discount programs and successive mandated rate reductions by the Division of Insurance. Recent rate activity has been favorable, however, with slight increases from the DOI (Digital Object Identifier) A method of applying a persistent name to documents, publications and other resources on the Internet rather than using a URL, which can change over time. and a general reduction in filed rate deviations by many companies, led by Commerce. The rating is based on the consolidated operating results and financial position of Commerce Insurance Co., its affiliate Citation Citation (foaled 1945) U.S. Thoroughbred racehorse. In four seasons he won 32 of 45 races, finished second in ten, and third in two. He won the 1948 Triple Crown, and became the first horse to win $1 million. He set a world record in 1950 by running a mile in 1:33 3/5. Insurance Co., and Commerce's subsidiaries: American Commerce Insurance Co. and Commerce West Insurance Co. The group rating applies to Commerce and Citation, as they operate under the same management team, share claims, underwriting and marketing operations, use the same distribution network, maintain joint administrative offices and 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. arrangements, and reflect the same market profile. A.M. Best also raised the A- (Excellent) rating for Commerce West Insurance Co., Pleasanton, Calif., to A (Excellent). This rating action recognizes the company's strategic relationship with the Commerce Group and is concurrent with the group's upgrade to A+ (Superior). As a member of the Commerce Group, the company serves as a strategic vehicle to enable the group to grow and expand business beyond its core state of Massachusetts. Commerce West benefits from this strategic relationship, as evidenced by the $10.0 million capital contribution from the parent company after being acquired in 1995, sharing reinsurance and investment programs and leveraging technology and management expertise throughout the group. The rating also is supported by the company's excellent capitalization and historically favorable operating performance. Offsetting these positive factors are the company's geographic concentration of risk and limited product scope, as business is written solely in California and focused on the personal auto market. As a result, Commerce West is subject to the increasingly competitive California personal auto market, as well as inherent regulatory and legislative risks associated with the state. A.M. Best also affirmed af·firm 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 A (Excellent) rating of American Commerce Insurance Co. 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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