AM Best Affirms Credit Ratings of Auto-Owners Insurance Company and Subsidiaries

OLDWICK, N.J., December 02, 2022--(BUSINESS WIRE)--AM Best has affirmed the Financial Strength Rating (FSR) of A++ (Superior) and the Long-Term Issuer Credit Ratings (Long-Term ICR) of "aa+" (Superior) of Auto-Owners Insurance Company (Auto-Owners) (Lansing, MI) and its four wholly owned property/casualty (P/C) companies that compose Auto-Owners Insurance Group (AOIG). At the same time, AM Best has affirmed the FSR of A+ (Superior) and the Long-Term ICRs of "aa-" (Superior) of the members of Concord Group Insurance Companies (Concord Group), which is led by Concord General Mutual Insurance Company (Concord General) (Concord, NH). Concurrently, AM Best has affirmed the FSR of A+ (Superior) and the Long-Term ICR of "aa-" (Superior) of Atlantic Casualty Insurance Company (Atlantic Casualty) (Goldsboro, NC). AM Best also has affirmed the FSR of A- (Excellent) and the Long-Term ICR of "a-" (Excellent) of Auto-Owners Specialty Insurance Company (AOSIC) (Dover, DE). Also, AM Best has affirmed the FSR of A (Excellent) and the Long-Term ICRs of "a" (Excellent) of California Capital Insurance Company (Monterey, CA) and its subsidiaries, which operate under an intercompany pooling arrangement, collectively referred to as Capital Insurance Group (Capital). In addition, AM Best has affirmed the FSR of A+ (Superior) and the Long-Term ICR of "aa-" (Superior) of Auto-Owners Life Insurance Company (AOLIC) (Lansing, MI), which is also a wholly owned subsidiary of Auto-Owners. The outlook of these Credit Ratings (ratings) is stable. (See below for a detailed listing of the companies).

The ratings of AOIG reflect its balance sheet strength, which AM Best assesses as strongest, as well as its very strong operating performance, favorable business profile and appropriate enterprise risk management (ERM).

AOIG has exhibited stable operating performance in the recent five-year period and maintains a business profile that is well-balanced between personal and commercial lines, and P/C business. Through its acquisition of Atlantic Casualty and AOSIC in 2016, its affiliation with Concord General in 2017 and its acquisition of Capital in 2019, AOIG has further broadened its business profile from a product and geographic perspective. These positive rating factors are offset partially by its exposure to credit risk associated with the Michigan Catastrophic Claims Association.

The ratings of Concord Group reflect its balance sheet strength, which AM Best assesses as strongest, as well as its adequate operating performance, neutral business profile and appropriate ERM.

Concord Group’s ratings reflect its risk-adjusted capitalization, which is assessed in the strongest category, as measured by Best’s Capital Adequacy Ratio (BCAR), as well as its favorable operating performance in recent years. The ratings also reflect Concord Group’s strategic position within the Auto-Owners’ organization, as well as the significant operating and financial benefits that Concord Group has realized as a result of its April 2017 affiliation with Auto-Owners.

The ratings of Atlantic Casualty reflect its balance sheet strength, which AM Best assesses as strongest, as well as its adequate operating performance, neutral business profile and appropriate ERM.

Atlantic Casualty’s ratings reflect the company’s favorable operating performance and supportive risk-adjusted capitalization, which is assessed in the strongest category, as measured by BCAR. Atlantic Casualty has realized tangible operating benefits and synergies derived from its ownership by Auto-Owners. In addition, the ratings recognize Atlantic Casualty’s strategic importance within the Auto-Owners’ organization, particularly evident in the company’s access to Auto-Owners’ distribution channel, which has contributed to growth in premiums, while maintaining favorable operating results.

The ratings of AOSIC reflect its balance sheet strength, which AM Best assesses as very strong, as well as its adequate operating performance, very limited business profile and appropriate ERM.

AOSIC is a shell company that plans to provide excess and surplus lines coverage to small- and medium-sized commercial businesses in North Carolina. AOSIC’s risk-adjusted capitalization is supportive of its business plan, which includes moderate premium growth projections. In addition, the company is led by a management team with a track record of generating favorable operating results at its sister company, Atlantic Casualty, and possessing extensive knowledge of the surplus lines and commercial P/C business. These positive rating factors are offset partially by the expected concentration of non-admitted business in one state.

The ratings of Capital reflect its balance sheet strength, which AM Best assesses as very strong, as well as its marginal operating performance, neutral business profile and appropriate ERM.

Capital’s ratings reflect its risk-adjusted capitalization, which is assessed in the strongest category, as measured by BCAR, as well as the group’s improved operating performance in recent years. The ratings also reflect the substantial explicit and implicit support received from Auto-Owners since December 2018, which followed severe net losses and surplus erosion due in part to the California wildfires in 2017 and 2018, as well as adverse reserve development on prior accident years in 2017.

The ratings of AOLIC reflect its balance sheet strength, which AM Best assesses as very strong, as well as its strong operating performance, neutral business profile and appropriate ERM.

The ratings consider AOLIC’s integral role and positive contribution to its P/C parent organization, diversified product portfolio, favorable level of risk-adjusted capitalization and high-quality investment portfolio.

The FSR of A++ (Superior) and the Long-Term ICRs of "aa+" (Superior) have been affirmed, each with a stable outlook, for Auto-Owners Insurance Company and its wholly owned P/C subsidiaries:

  • Home-Owners Insurance Company

  • Owners Insurance Company

  • Property-Owners Insurance Company

  • Southern-Owners Insurance Company

The FSR of A+ (Superior) and the Long-Term ICRs of "aa-" (Superior) have been affirmed, each with a stable outlook, for the following members of Concord Group Insurance Companies:

  • Concord General Mutual Insurance Company

  • Green Mountain Insurance Company, Inc.

  • State Mutual Insurance Company

  • Sunapee Mutual Fire Insurance Company

  • Vermont Accident Insurance Company, Inc.

The FSR of A (Excellent) and the Long-Term ICRs of "a" (Excellent) have been affirmed, each with a stable outlook, for the following members of Capital Insurance Group:

  • California Capital Insurance Company

  • Eagle West Insurance Company

  • Monterey Insurance Company

  • Nevada Capital Insurance 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 use of Best’s Credit Ratings, Best’s Performance Assessments, Best’s Preliminary Credit Assessments and AM Best press releases, please view Guide to Proper Use of Best’s Ratings & Assessments.

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 London, Amsterdam, Dubai, Hong Kong, Singapore and Mexico City. For more information, visit www.ambest.com.

Copyright © 2022 by A.M. Best Rating Services, Inc. and/or its affiliates. ALL RIGHTS RESERVED.

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Contacts

Robert Valenta
Senior Financial Analyst
+1 908 439 2200, ext. 5291
robert.valenta@ambest.com

Christopher Sharkey
Manager, Public Relations
+1 908 439 2200, ext. 5159
christopher.sharkey@ambest.com

Raymond Thomson, CPCU, ARe, ARM
Associate Director
+1 908 439 2200, ext. 5621
raymond.thomson@ambest.com

Al Slavin
Senior Public Relations Specialist
+1 908 439 2200, ext. 5098
al.slavin@ambest.com