CONTACTS:
FOR IMMEDIATE RELEASE
OLDWICK - JANUARY 15, 2015 03:18 PM (EST)
A.M. Best has affirmed the financial strength rating of A- (Excellent) and the issuer credit rating of "a-" of Forward Mutual Insurance Company (Forward) (Ixonia, WI). The outlook for both ratings is stable. Concurrently, A.M. Best has withdrawn the ratings as the company has requested to no longer participate in A.M. Best's interactive rating process.
The ratings reflect Forward's strong risk-adjusted capitalization driven by its low underwriting leverage, minimal loss reserve risk due on its short-tail property book of business and low investment risk on its bond portfolio. In addition, the company's conservative investment portfolio generated steady investment income that supported pre-tax operating income. Offsetting these rating factors are the company's historically mixed underwriting performance, dependence on investments for operating income, susceptibility to frequent and severe weather-related losses due to its geographic concentration and limited product offerings. Additionally, the company has elevated common stock leverage that exposes policyholders' surplus to equity market volatility. Under a town mutual charter, the company provides homeowners and farmowners coverage in sixteen counties in southeastern Wisconsin, where it has developed long-standing agency relationships.
The methodology used in determining these ratings is Best's Credit Rating Methodology, which provides a comprehensive explanation of A.M. Best's rating process and contains the different rating criteria employed in the rating process. Best's Credit Rating Methodology can be found at www.ambest.com/ratings/methodology.
Key insurance criteria reports utilized:
This press release relates to rating(s) that have been published on A.M. Best's website. For all rating information relating to the release and pertinent disclosures, including details of the office responsible for issuing each of the individual ratings referenced in this release, please visit A.M. Best's Ratings & Criteria Center.
A.M. Best Company is the world's oldest and most authoritative insurance rating and information source.