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A.M. Best Assigns Ratings to The Mutual Fire Insurance Company of British Columbia.

OLDWICK, N.J. -- A.M. Best Co. has assigned a financial strength rating of A- (Excellent) and issuer credit rating of "a-" to The Mutual Fire Insurance Company of British Columbia (Mutual Fire) (Langley, BC). The outlook assigned to both ratings is stable.

The ratings and outlook for Mutual Fire are reflective of its excellent risk-adjusted capitalization, sound pure loss ratios, consistently profitable operating performance and local market presence. The company's focused underwriting discipline has consistently produced favorable pure loss ratios for the latest five- and ten-year periods. Mutual Fire also has benefited from a favorable operating performance, which has resulted in positive pretax operating returns every year for the same five- and ten-year periods. Furthermore, the company has a dominant market presence in British Columbia, providing it with a local competitive advantage.

Partially offsetting these positive rating factors are Mutual Fire's elevated expense ratio and the potential challenges it may encounter as it expands into new markets across the western region of Canada. The composition of other underwriting expenses has tempered the otherwise strong loss results recently. The company attributes this to the modernization of technology infrastructure and business development, which has added several points to the underwriting expense ratio. Going forward, A.M. Best believes Mutual Fire is generally well positioned to maintain positive operating results.

The principal methodology used in determining these ratings is Best's Credit Rating Methodology -- Global Life and Non-Life Insurance Edition, which provides a comprehensive explanation of A.M. Best's rating process and highlights the different rating criteria employed. Additional key criteria utilized include: "Risk Management and the Rating Process for Insurance Companies"; "Catastrophe Risk Management Incorporated Within the Rating Analysis"; and "Understanding BCAR for Canadian Property/Casualty Insurers." Methodologies can be found at

Founded in 1899, A.M. Best Company is the world's oldest and most authoritative insurance rating and information source. For more information, visit

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Publication:Business Wire
Geographic Code:1CBRI
Date:Jan 28, 2011
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