A.M. Best Affirms Ratings of Fireman’s Fund Insurance Company and Its Affiliates Business Wire OLDWICK, N.J. -- July 10, 2013 A.M. Best Co. has affirmed the financial strength rating (FSR) of A (Excellent) and issuer credit ratings (ICR) of “a” of Fireman’s Fund Insurance Company (FFIC) (Novato, CA) and its reinsured affiliates, collectively referred to as Fireman’s Fund. The outlook for all ratings is stable. (See below for a detailed listing of the companies.) At the same time, A.M. Best has withdrawn the ICR of “a-” of FFIC’s immediate parent, Allianz of America, Inc. (Delaware), reflecting its status as a private, intermediate holding company. The ratings reflect Fireman’s Fund’s supportive level of risk-adjusted capitalization, strong brand recognition and market expertise within specialty commercial lines and high net worth individuals. Furthermore, the ratings recognize the strategic importance of Fireman’s Fund’s U.S. market presence to the global insurance operations of Allianz Societas Europaea (Allianz SE), its Germany-based ultimate parent. The ratings of Fireman’s Fund reflect the substantial explicit and implicit support of Allianz SE, which is demonstrated by capital contributions and critical reinsurance. These positive rating factors are offset by the deterioration in Fireman’s Fund’s underwriting performance in recent years due to increased catastrophe losses and significant adverse reserve development of prior years’ loss reserves. Underwriting losses, coupled with declining net investment income, have resulted in net operating losses in both 2011 and 2012. Most notably, in 2012, a combination of multi-peril crop losses, Superstorm Sandy-related losses and adverse reserve development contributed to the organization’s poor underwriting results. Management continues to take corrective actions to improve results; however, it is expected it will take several years for Fireman’s Fund to return to consistent profitability. A.M. Best expects that Allianz SE will continue to provide support to Fireman’s Fund, helping to maintain a level of capital that will remain supportive of its ratings as management’s initiatives take effect. A.M. Best believes that Fireman’s Fund is adequately positioned at its current rating level and does not anticipate favorable rating actions in the near to midterm. Negative rating actions may occur for Fireman’s Fund over the near to midterm if there is a continued decline in its underwriting profitability, considerable deterioration in its risk-adjusted capitalization as measured by Best’s Capital Adequacy Ratio or if A.M. Best determines that Fireman’s Fund’s strategic importance to Allianz SE no longer warrants the current level of rating enhancement. The FSR of A (Excellent) and ICRs of “a” have been affirmed for Fireman’s Fund Insurance Company and its following reinsured affiliates: *American Automobile Insurance Company *National Surety Corporation *The American Insurance Company *Associated Indemnity Corporation *Chicago Insurance Company *Fireman’s Fund County Mutual Insurance Company *Fireman’s Fund Indemnity Corporation *Fireman’s Fund Insurance Company of Hawaii, Inc. *Fireman’s Fund Insurance Company of Ohio *Interstate Fire & Casualty Company 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 www.ambest.com/ratings/methodology. 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. Contact: A.M. Best Co. Adrienne Tortoriello Senior Financial Analyst (908) 439-2200, ext. 5088 firstname.lastname@example.org or Jennifer Marshall Managing Senior Financial Analyst (908) 439-2200, ext. 5327 email@example.com or Rachelle Morrow Senior Manager, Public Relations (908) 439-2200, ext. 5378 firstname.lastname@example.org or Jim Peavy Assistant Vice President, Public Relations (908) 439-2200, ext. 5644 email@example.com
A.M. Best Affirms Ratings of Fireman’s Fund Insurance Company and Its Affiliates
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