A.M. Best Affirms Ratings of Philadelphia Insurance Companies Members
OLDWICK, N.J. -- February 28, 2013
A.M. Best Co. has affirmed the financial strength rating (FSR) of A++
(Superior) and issuer credit ratings (ICR) of “aa+” of Philadelphia Indemnity
Insurance Company (PIIC) and its affiliate, Tokio Marine Specialty Insurance
Company) (both headquartered in Bala Cynwyd, PA), which operate under a
pooling agreement, collectively referred to as Philadelphia Insurance
Companies (Philadelphia). The outlook for these ratings is stable.
Concurrently, A.M. Best has affirmed the FSR of A- (Excellent) and ICR of “a-”
of Liberty American Insurance Company and Liberty American Select Insurance
Company (both domiciled in Altamonte, FL), which operate under a pooling
agreement, collectively referred to as Liberty American Insurance Group
(Liberty American). The outlook for all ratings is stable.
All companies are subsidiaries of Tokio Marine North America Inc., which is an
insurance holding company subsidiary of Tokio Marine & Nichido Fire Insurance
Co., Ltd. (TMNF), a subsidiary of Tokio Marine Holdings, Inc. (TMHD) (both
domiciled in Tokyo, Japan).
The ratings of Philadelphia reflect its superior operating performance, strong
level of capitalization, solid liquidity and excellent market presence within
the specialty commercial marketplace. The ratings also acknowledge the group's
excellent operating cash flow, solid liquidity measures, well-developed
enterprise risk management (ERM) platform and strong management team, which
takes into consideration the leadership change earlier this month with the
appointment of Mr. Robert D. O’Leary as President and CEO, who has been with
the organization since 1982. The ratings also recognize the strategic
importance of the group to TMHD, as the group plays an important and strategic
role in supporting TMHD's global expansion strategy.
A.M. Best believes that Philadelphia is well positioned at the current
ratings. Looking forward, negative rating action could occur if capitalization
and/or operating performance fall markedly short of A.M. Best’s expectations
primarily as a result of any material increase in frequency and severity of
catastrophe losses. The ratings can also be negatively impacted by any
negative rating actions on TMNF and/or a change in support from or
relationship with TMHD.
The ratings of Liberty American recognize its modest underwriting leverage and
adequate liquidity, which more than support the current run off of the group’s
personal lines business and the pass-through business written on behalf of the
National Flood Insurance Program, a program that is being transferred to PIIC.
Potential upward movement in Liberty American’s ratings could result from a
more defined role as a subsidiary of TMHD. Possible downward movement in the
ratings could result from a significant decline in operating performance and
capitalization, any negative rating actions taken on TMHD’s subsidiaries
and/or any lessening of support provided by TMHD and its subsidiaries.
The methodology used in determining these ratings is Best’s Credit Rating
Methodology, which provides a comprehensive explanation of A.M. Best’s rating
process and contains the different rating criteria employed in the rating
process. Best’s Credit Rating Methodology can be found at
Founded in 1899, A.M. Best Company is the world’s oldest and most
authoritative insurance rating and information source. For more information,
Copyright © 2013 by A.M. Best Company, Inc. ALL RIGHTS RESERVED.
A.M. Best Co.
Richelle Bryan, 908-439-2200, ext. 5344
Joseph Roethel, 908-439-2200, ext. 5630
Assistant Vice President
Rachelle Morrow, 908-439-2200, ext. 5378
Senior Manager, Public Relations
Jim Peavy, 908-439-2200, ext. 5644
Assistant Vice President, Public Relations
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