FOR IMMEDIATE RELEASE
OLDWICK – MARCH 03, 2021 02:34 PM (EST)
AM Best has upgraded the Financial Strength Rating to A (Excellent) from A- (Excellent) and the Long-Term Issuer Credit Rating to “a” from “a-” of Eastern Mutual Insurance Company (Eastern Mutual) (Greenville, NY). The outlook of these Credit Ratings (ratings) has been revised to stable from positive.
These ratings reflect Eastern Mutual’s balance sheet strength, which AM Best assesses as very strong, as well as its strong operating performance, limited business profile and appropriate enterprise risk management (ERM).
The rating upgrades reflect Eastern Mutual’s ability to maintain risk-adjusted capitalization at the strongest level consistently, as measured by Best’s Capital Adequacy Ratio (BCAR), while organically growing surplus through underwriting and investment income. Underwriting leverage metrics compare favorably with the personal property composite averages and loss reserve development has been consistently favorable. Liquidity metrics have remained above the composite averages supported by positive cash flows in each of the past five years. The investment portfolio is primarily composed of fixed income securities with an average duration of five years. While the company does have exposure to equity risk through its common stock portfolio, the allocation is limited per guidelines set forth in its investment policy.
Operating performance is expected to remain strong through ongoing underwriting efforts and a track record of favorable loss experience. Strong results have been achieved despite the limited business profile with Eastern Mutual doing business solely in New York, primarily writing commercial multiperil and homeowners’ insurance policies. The ERM program is considered appropriate for Eastern Mutual’s size and scope; however, AM Best expects management to continue to build out the formal documentation and sophistication of the program.
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.
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.