Press Release - MAY 14, 2018

A.M. Best Upgrades Issuer Credit Ratings of Members of Central Insurance Companies


CONTACTS:
 Kim Muccia
Financial Analyst
+1 908 439 2200, ext. 5731
kimberly.muccia@ambest.com

Brian O’Larte
Director
+1 908 439 2200, ext. 5138
brian.o’larte@ambest.com

Christopher Sharkey
Manager, Public Relations
(908) 439 2200, ext. 5159
christopher.sharkey@ambest.com

Jim Peavy
Director, Public Relations
(908) 439 2200, ext. 5644
james.peavy@ambest.com

FOR IMMEDIATE RELEASE

OLDWICK - MAY 14, 2018
A.M. Best has upgraded the Long-Term Issuer Credit Ratings (Long-Term ICR) to “a+” from “a” and affirmed the Financial Strength Rating (FSR) of A (Excellent) of Central Mutual Insurance Company and All America Insurance Company, which are collectively referred to as Central Insurance Companies (Central). Both companies are domiciled in Van Wert, OH. The outlook of the Long-Term ICRs has been revised to stable from positive, while the outlook of the FSR remains stable.

The Credit Ratings (ratings) reflect Central’s balance sheet strength, which A.M. Best categorizes as strongest, as well as its adequate operating performance, neutral business profile and appropriate enterprise risk management. The rating actions reflect improved and stabilized underwriting performance over the most recent five-year period through 2017 as a result of significant underwriting initiatives, including rate adequacy. Net underwriting gains were supplemented with net investment income in each of the past five years, as opposed to net underwriting losses generated in the prior five-year period. Historically, Central has been impacted by weather-related losses; however, the implementation of several personal lines and commercial lines underwriting initiatives helped combat weather-related losses. Additionally, Central has a comprehensive reinsurance program that helps shield the balance sheet from large catastrophe events. As a result, a combined ratio below break-even has been generated in each of the past five years, which compare favorably with industry averages.

Central’s balance sheet strength is supported by the strongest level of risk-adjusted capitalization, favorable loss reserving trends, a prudent investment portfolio and strong liquidity measures. Surplus growth is vigorous and has averaged 10% on a five-year compound average basis, largely driven by improved underwriting results, strong investment earnings, and capital gains (realized and unrealized). The companies operate across the United States, licensed in 37 states with premium written in 23 of those states through the use of independent agents and four regional offices. Central offers a broad array of personal and commercial products including homeowners, private passenger auto liability and commercial multi-peril lines, to name a few.

This press release relates to Credit Ratings 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 see A.M. 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 A.M. Best press releases, please view Guide for Media - Proper Use of Best’s Credit Ratings and A.M. Best Rating Action Press Releases.

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