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A.M. Best Affirms Ratings of Electric Insurance Company and Its Subsidiary


CONTACTS:

Jacqalene Lentz
Senior Financial Analyst
(908) 439-2200, ext. 5762
jacqalene.lentz@ambest.com

Greg Williams
Assistant Vice President
(908) 439-2200, ext. 5815
greg.williams@ambest.com
Christopher Sharkey
Manager, Public Relations
(908) 439-2200, ext. 5159
christopher.sharkey@ambest.com

Jim Peavy
Assistant Vice President, Public Relations
(908) 439-2200, ext. 5644
james.peavy@ambest.com

FOR IMMEDIATE RELEASE

OLDWICK - JULY 30, 2015 09:01 AM (EDT)
A.M. Best has affirmed the financial strength rating of A (Excellent) and the issuer credit ratings of "a+" of Electric Insurance Company (Electric) (Beverly, MA) and its wholly owned subsidiary, Electric Insurance Ireland Limited (EIIL) (Dublin, Ireland). The outlook for all ratings is stable.

The ratings reflect Electric's strong risk-adjusted capitalization, sustained operating profitability and broad geographic and product line diversification. The ratings also take into consideration the value-added commercial insurance services provided to General Electric Company (GE), as well as Electric's strategic importance to GE.

The ratings for Electric are afforded to EIIL primarily due to its affiliation with Electric, its integration into Electric's business plan, as well as its supportive capitalization, profitable operating performance and strategic role in providing commercial lines products to GE in the European Union.

Partially offsetting these positive rating factors are limitations on its commercial lines business to one policyholder, GE. Most commercial lines are retrospectively rated however, contributing to reduced risk and steady earnings. Retrospective rating features in the commercial policies limit the earnings potential of the insurance company; however, the feature also protects the company from excessive loss by allowing it to charge back losses through premium adjustments. In addition, although decreasing, Electric has a significant gross exposure in its workers' compensation line, which is materially diminished by reinsurance protection afforded by Terrorism Risk Insurance Program Reauthorization Act (TRIPRA).

Future positive rating action could be taken on Electric's ratings should profitability and capital appreciation continue to remain strong. However, the ratings may come under pressure if there is a material weakening in risk-adjusted capital or if there is a reduction in Electric's strategic importance to GE or its overall business profile.

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.

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