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FOR IMMEDIATE RELEASE
OLDWICK - FEBRUARY 11, 2020 08:32 AM (EST)
AM Best has revised the outlooks to positive from stable and affirmed the Financial Strength Rating of A- (Excellent) and the Long-Term Issuer Credit Rating of “a-” of Eastern Mutual Insurance Company (Eastern Mutual) (Greenville, NY).
These Credit Ratings (ratings) reflect Eastern Mutual’s balance sheet strength, which AM Best categorizes as very strong, as well as its strong operating performance, limited business profile and appropriate enterprise risk management (ERM).
The revised outlooks reflect improvement in the balance sheet strength of the company as evidenced by consistent surplus growth through both underwriting and investment activities. While material growth is subject to volatility due to the company’s scale, capital has consistently improved year-over-year. Furthermore, Eastern Mutual’s strongest level of risk-adjusted capitalization, as measured by Best’s Capital Adequacy Ratio, is paired with consistently favorable overall loss reserve development, low underwriting leverage and modest reinsurance dependency.
The company’s operating performance remains strong and supported by a five-year average combined ratio that outperforms the personal property composite, driven by a materially better loss ratio and partially offset by an elevated expense ratio. The expense ratio is influenced by the relatively small scale of the company. The focused geographic and product composition is captured in the limited assessment of business profile. Appropriate ERM practices are commensurate for the complexity and size of the company.
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 Guide to 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.
AM Best is a global credit rating agency, news publisher and data analytics provider specializing in the insurance industry. Headquartered in the United States, the company does business in over 100 countries with regional offices in New York, London, Amsterdam, Dubai, Hong Kong, Singapore and Mexico City.