A.M. Best Upgrades and Assigns Ratings to North Star Companies.

OLDWICK, N.J. -- A.M. Best Co. has upgraded the financial strength rating (FSR) to A+ (Superior) from A (Excellent) and assigned issuer credit ratings of "aa-" to North Star Companies (NSC), which includes North Star Mutual Insurance Company. The outlook for both ratings is stable. All companies are domiciled in Cottonwood, MN.

The ratings reflect NSC's superior capitalization, outstanding operating performance and long-standing market presence as the leading farm wind and hail writer in Minnesota. The ratings also recognize NSC's modest underwriting leverage, favorable loss reserve development, conservative investment portfolio and strong balance sheet liquidity.

Partially offsetting these positive rating factors is NSC's elevated underwriting expense ratio and geographic concentration of risk in the upper Midwest region, with 66% of its business concentrated in Minnesota. As a result, NSC's surplus and operating performance are inherently exposed to severe weather-related loss activity.

NSC's underwriting performance and surplus growth over several consecutive years were noteworthy and primarily attributable to its established market presence, disciplined underwriting approach and quality customer service practices. Favorable loss experience and consistent growth in investment income generated five year returns on revenue and equity that significantly outperformed the industry composite.

For Best's Ratings, an overview of the rating process and rating methodologies, please visit www.ambest.com/ratings.

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.