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FOR IMMEDIATE RELEASE
OLDWICK - JUNE 13, 2019 03:34 PM (EDT)
AM Best has upgraded the Long-Term Issuer Credit Ratings (Long-Term ICR) to “bbb+” from “bbb” and affirmed the Financial Strength Rating of B++ (Good) of the members of Fire Districts Insurance Group (FDIG). FDIG consists of Fire Districts of New York Mutual Insurance Company, Inc. and its wholly owned subsidiaries, FDM Preferred Insurance Company, Inc. and Fire Districts Insurance Company, Inc. (all domiciled in Pearl River, NY). The outlook of the Credit Ratings (ratings) remains stable.
The ratings reflect FDIG’s balance sheet strength, which AM Best categorizes as strong, as well as its strong operating performance, limited business profile and appropriate enterprise risk management.
The Long-Term ICRs of FDIG were upgraded based on the group’s significant improvement in operating earnings and increase in policyholders’ surplus in the most-recent five-year period, and the group’s ability in AM Best’s view to sustain this performance over time. In 2018, better-than-average operating earnings led to a significantly improved balance sheet. AM Best believes that management’s effective use of deviated rate plans and improved safety procedures are key components to the group’s dramatically improved results over the last two years. As a result, FDIG’s return on equity and revenue measures outperform its peers on a five-year basis.
The ratings also take into consideration the group’s high level of reinsurance dependence and its limited business profile, as FDIG’s sole line of business is providing workers’ compensation coverage to volunteer firefighters in New York. As a single-state, monoline insurer, FDIG is subject to regulatory and legislative pressures, as well as to the high cost of operating in the state. FDIG benefits from its long-standing, local market presence and expertise in the narrow market that it has served since its formation in 1978.
This press release relates to Credit Ratings that have been published on AM 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 see AM Best’s Recent Rating Activity web page. For additional information regarding the use and limitations of Credit Rating opinions, please view Understanding Best’s Credit Ratings. For information on the proper media use of Best’s Credit Ratings and AM Best press releases, please view Guide for Media - Proper Use of Best’s Credit Ratings and AM Best Rating Action Press Releases.
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