AM Best Affirms Credit Ratings of Members of Erie Insurance Groupand Erie Family Life Insurance Company.
ENPNewswire-July 29, 2021--AM Best Affirms Credit Ratings of Members of Erie Insurance Groupand Erie Family Life Insurance Company
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Release date- 28072021 - 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 the property/casualty (P/C) members of Erie Insurance Group (Erie).
The outlook of the FSR is stable while the outlook for the Long-Term ICRs is negative. Additionally, AM Best has affirmed the FSR of A (Excellent) and the Long-Term ICR of 'a' (Excellent) of Erie Family Life Insurance Company (EFL). The outlook of these Credit Ratings (ratings) is stable. All companies are domiciled in Erie, PA, unless otherwise specified.
Erie Insurance Exchange is the lead company of Erie; the remainder of the P/C group is composed of inter-company pooling members, Erie Insurance Company and Erie Insurance Company of New York (Rochester, NY), and reinsured subsidiaries Erie Insurance Property & Casualty Company and Flagship City Insurance Company.
The ratings of Erie reflect its balance sheet strength, which AM Best assesses as strongest, as well as its strong operating performance, favorable business profile and appropriate enterprise risk management (ERM).
The balance sheet strength assessment is supported Erie's risk-adjusted capitalization at the strongest level, as measured by Best's Capital Adequacy Ratio (BCAR), consistent surplus growth and favorable loss reserve trends. While Erie is concentrated in the mid-Atlantic, which exposes the group to weather-related losses, it benefits from its extensive independent agency force and large market shares in its home states.
The negative outlook on Erie's Long-Term ICR reflects the deterioration in the company's operating performance, which is due mainly to weather-related losses in 2018 and 2019. While the company's operating results did improve in 2020, predominantly from a drop in claims frequency in auto lines and a decrease in weather-related events, Erie's five-year and 10-year operating results do continue to lag similarly related peers. If the five and 10-year trends continue to show sufficient underwriting deterioration such that operating results and overall operating performance also are impacted, the overall operating performance assessment...
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