AM Best has affirmed the financial strength rating of ‘A-’ (Excellent) and the long-term issuer credit ratings (ICR) of ‘a-’ (Excellent) of the property/casualty (P/C) subsidiaries of United Fire Group (UFG) — collectively known as United Fire & Casualty Group. The agency has also affirmed the long-term ICR of ‘bbb-’ (Good) of UFG, in addition to the long-term issue credit rating of ‘bbb-’ (Good) on UFG’s US$100 million, nine per cent senior unsecured notes, due 2039. Best says the ratings reflect United Fire & Casualty Group’s balance sheet strength, which they cite as being ‘very strong’, in addition to its marginal operating performance, neutral business profile, and appropriate enterprise risk management. The agency expects the group’s near-term operating performance and balance sheet strength metrics to be in line with recently reported results, despite competitive market conditions and risk exposure to natural disasters. Best adds that the group benefits from its well-established position within core markets, with solid regional franchise, local market knowledge, and long-standing agency relationships. The affirmations apply to the following subsidiaries: Lafayette Insurance Company; Addison Insurance Company; United Fire & Indemnity Company; United Fire Lloyds; Mercer Insurance Company; Financial Pacific Insurance Company; Mercer Insurance Company of New Jersey; Franklin Insurance Company UFG Specialty Insurance Company Management continues to focus on managing exposure to potential catastrophe and weather-related losses, Best notes, with recent results benefiting from earned rate increases, in addition to natural catastrophe losses occurring at lower-than-historical averages.
