A.M. Best Affirms Ratings of Philmont Insurance Company

  A.M. Best Affirms Ratings of Philmont Insurance Company  Business Wire  OLDWICK, N.J. -- June 4, 2014  A.M. Best has affirmed the financial strength rating of B++ (Good) and the issuer credit rating of “bbb+” of Philmont Insurance Company (Philmont) (Burlington, VT). The outlook for 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, 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 strengthening factors for the ratings, given the company’s 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 affirmation 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.  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 © 2014 by A.M. Best Company, Inc. ALL RIGHTS RESERVED.  Contact:  A.M. Best Company Fred Eslami, 908-439-2200, ext. 5406 Senior Financial Analyst fred.eslami@ambest.com or Steven Chirico, CPA, 908-439-2200, ext. 5087 Assistant Vice President steven.chirico@ambest.com or Jim Peavy, 908-439-2200, ext. 5644 Assistant Vice President, Public Relations james.peavy@ambest.com  
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