A.M. Best Assigns Ratings to Philmont Insurance Company

  A.M. Best Assigns Ratings to Philmont Insurance Company

Business Wire

OLDWICK, N.J. -- June 5, 2013

A.M. Best Co. has assigned a financial strength rating of B++ (Good) and an
issuer credit rating of “bbb+” to Philmont Insurance Company (Philmont)
(Burlington, VT). The outlook assigned to both ratings is stable.

The ratings and outlook reflect Philmont’s strong capitalization and
conservative operating strategy. The ratings also consider the company’s
critical role and favorable profile as part of the Toll Brothers, Inc. (NYSE:
TOL) organization, as well as its strong operating performance during the past
five years providing insurance coverage to various projects and subsidiaries
of Toll Brothers, Inc. for certain liability risks.

Partially offsetting these positive rating factors are Philmont’s relatively
large reserves and its incurred but not reported reserves. Nevertheless, A.M.
Best recognizes the strong liquidity position of Philmont and the substantial
financial resources of the Toll Brothers, Inc. organization.

A.M. Best views Philmont’s management and corporate strategy as a
strengthening factor for the ratings, given its conservative underwriting,
operational goals and transparency. A.M. Best views Philmont’s enterprise risk
management practices as strong given their impact on the company’s
conservative risk culture, defined risk controls and the optimizing of its
capital and surplus. Other factors A.M. Best considered in the assigning of
the ratings include, but are not limited to, Philmont’s diversification in its
line of business and geography, as well as the support and commitment of its
parent and its own mission.

A.M. Best expects Philmont’s future operating performance to be stable but
strong, and the stable earnings profile should further support its growth and
business writing, which is consistent with its capital and surplus position.

Philmont’s ratings and outlook are not expected to be upgraded within the next
12-24 months as its operating performance and capital position have already
been considered in the ratings process. A.M. Best could downgrade the
company’s ratings and/or revise the outlook if its Best’s Capital Adequacy
Ratio (BCAR) score declines, operating performance and risk profile
deteriorate, insured losses deplete capital, significant changes and turnover
occur in its management team and/or risk management controls and tolerances,
or Toll Brothers, Inc.’s ratings deteriorate.

A.M. Best remains the leading rating agency of alternative risk transfer
entities, with more than 200 such vehicles rated in the United States and
throughout the world. For current Best’s Credit Ratings and independent data
on the captive and alternative risk transfer insurance market, please visit

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

A.M. Best Company is the world’s oldest and most authoritative insurance
rating and information source. For more information, visit www.ambest.com.

       Copyright © 2013 by A.M. Best Company, Inc. ALL RIGHTS RESERVED.


A.M. Best Co.
Fred Eslami, 908-439-2200, ext. 5406
Senior Financial Analyst
Steven Chirico, CPA, 908-439-2200, ext. 5087
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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