A.M. Best announced on Sept. 10 that it has upgraded the financial strength rating to A+ (Superior) from A (Excellent) and the issuer credit rating to “aa-” from “a” of New England Mutual Insurance Company (NEMIC).
Concurrently, the financial strength rating of A+ (Superior) and the issuer credit rating of “aa-” was affirmed for members of Quincy Mutual Group, which includes NEMIC’s parent company, Quincy Mutual Fire Insurance Company (Quincy Mutual), and Patrons Oxford Insurance Company (Patrons). Quincy Mutual and NEMIC are domiciled in Quincy, Massachusetts, while Patrons is domiciled in Auburn, Maine. The outlook for all ratings is stable.
NEMIC is fully integrated into Quincy Mutual Group’s operations and is operated by the same management team as Quincy Mutual. NEMIC is utilized as a vehicle for price tiering and targeted underwriting criteria. The company writes standard homeowners business solely in Massachusetts.
A.M. Best noted that on July 1, 2015, a quota share agreement was established between NEMIC and Quincy Mutual whereby all business written in NEMIC is ceded into Quincy Mutual Fire Insurance Company. Given the explicit and implicit support provided to NEMIC, the ratings of Quincy Mutual have been extended to the company, the ratings agency said.
A.M. Best also said negative rating pressure may occur if frequent and severe weather events have a material impact on Quincy Mutual’s exposures, which are concentrated in a limited geographical location in the Northeast, or other market disruptions cause underwriting losses as well as the volatility in the equity markets that can have a substantial adverse effect on risk-adjusted capitalization.
Key drivers that could lead to positive rating actions would be Quincy Mutual producing a strong operating performance over several years that consistently outperforms the industry composite.
Source: A.M. Best Company Inc.
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