Standing. Test. Time

Transcription

1 July 2014 BEST S REVIEW Monthly Insurance News Magazine Leaders The Issue Standing Insurers Agents & Brokers Reinsurers Test The Time Of Sixty-three property/casualty insurers and 12 life/health carriers have maintained a Best s Financial Strength Rating of A or higher for at least 75 years. When carriers reflect back on the prior year, they certainly have much reason to celebrate. Not only did property/casualty carriers enjoy their strongest financial performance since the recession, they also dodged a bullet in what was the 20 BEST S REVIEW Copyright JULY by A.M. Best Company, Inc. Published in Best s Review, July All Rights Reserved. For web posting only.

2 sixth-least active Atlantic hurricane season since 1950, according to information from the Property/ Casualty Insurance Joint Industry Forum. Tornado activity in 2013 also ran far below the long-run U.S. average, despite a series of tornadoes in Oklahoma in May. Life writers in the voluntary market also are coming off a good year. In 2013, life insurance sales in that market totaled $1.88 billion up 22% from the prior year, according to the marketing advisory firm Eastbridge Consulting Group. Seventy-five insurance companies 63 property/casualty carriers and 12 life/health insurers also had reason to revel in Each stood the test of time by retaining an A.M. Best credit rating of A or higher for at least 75 years. Another group of 77 companies 55 property/casualty writers and 22 life/health carriers kept their A or higher rating intact for at least 50 consecutive years. Property/casualty carriers Federal Insurance Co., Hartford Fire Insurance Co. and New Hampshire Insurance Co. all have 108 consecutive years with an A or higher rating. On the life/health side, Genworth Life and Annuity Insurance, Northwestern Mutual Life Insurance, Penn Mutual Life Insurance Co. and Prudential Insurance Company of America all had 87 consecutive years of an A or higher rating from A.M. Best. In 2013, Otsego Mutual Fire Insurance. Co., Nationwide Mutual Fire Insurance Co. and State Farm Fire and Casualty Co. joined the list of 75 year-plus carriers on the P/C side. Otsego Mutual Fire Insurance, incorporated on March 10, 1897, is one of the New York state standard advance premium co-operative fire insurance companies operating under provisions of Higher for 75 Years 21st Century Pacific Ins Co A AIG Property Casualty Co A American Automobile Ins Co A American Insurance Company A American States Insurance Co A Amica Mutual Insurance Co A++ Baltimore Equitable Society A+ Cambridge Mutual Fire Ins Co A+ Continental Casualty Company A COUNTRY Mutual Insurance Co A+ CSAA Insurance Exchange A+ Erie Insurance Exchange A+ Euler Hermes NA Insurance Co A+ Farmers Mutual Ins Co of NE A Federal Insurance Company A++ Federated Mutual Ins Co A+ Fidelity and Deposit Co of MD A+ Fireman's Fund Insurance Co A General Ins Co of America A General Reinsurance Corp A++ Germantown Mutual Ins Co A Granite State Insurance Co A Great American Insurance Co A+ Great Northern Insurance Co A++ Hartford Accident & Indem Co A Hartford Casualty Ins Co A Hartford Fire Insurance Co A Hartford Steam Boiler I & I A++ Hartford Underwriters Ins Co A Illinois National Insurance Co A Insurance Co of the State PA A Lititz Mutual Insurance Co A Merrimack Mutual Fire Ins Co A+ Montgomery Mutual Ins Co A Munich Reinsurance America Inc A+ Mutual Assurance Society of VA A+ National Fire Ins Hartford A National Surety Corporation A National Union Fire Ins Co PA A Nationwide Mutual Fire Ins Co A+ Nationwide Mutual Ins Co A+ New Hampshire Insurance Co A New Jersey Manufacturers Ins A++ Continued on page 3

3 Higher for 75 Years Continued from page 2 New York Central Mutual Fire A+ Ohio Farmers Insurance Co A OneBeacon Insurance Company A u Otsego Mutual Fire Ins Co A+ Pacific Indemnity Company A++ Peerless Insurance Company A Pharmacists Mutual Ins Co A Philadelphia Contrib for Ins A+ Quincy Mutual Fire Ins Co A+ Selective Ins Co of America A St. Paul Fire & Marine Ins Co A+ State Automobile Mutual Ins Co A State Farm Fire & Casualty Co A+ State Farm Mutual Auto Ins Co A++ Tri-State Insurance Co of MN A+ Twin City Fire Insurance Co A United Services Auto Assn A++ Western Surety Company A Westfield Insurance Company A Westport Insurance Corp A+ Life/Health Insurers Higher for 75 Years Columbus Life Insurance Co A+ COUNTRY Life Ins Co A+ Genworth Life and Annuity Ins A Massachusetts Mutual Life Ins A++ Metropolitan Life Ins Co A+ New York Life Ins Co A++ Northwestern Mutual Life Ins A++ Penn Mutual Life Ins Co A+ Principal Life Insurance Co A+ Prudential Ins Co of America A+ Standard Insurance Company A Western and Southern Life Ins A+ the Article XI-B of the state insurance law. In 1942, the company merged with the Chemical Mutual Insurance Co. under the title and charter of the Otsego Mutual Fire Insurance Co. Nationwide Mutual Fire incorporated in Ohio in 1933 and began business the following year. Operations were conducted under the Farm Bureau Mutual Fire Insurance Co. from inception until Sept. 1, 1955, when the present corporate name was adopted. The company currently writes primarily personal lines, with homeowners representing more than 40% of its direct writings. State Farm Fire and Casualty was organized in 1935 under the laws of Illinois and commenced business in June of that same year. The present title was adopted in 1950 when the company absorbed by merger the State Farm Casualty Co. On the life/health side, Massachusetts Mutual Life, which has had an A++ rating since 1939, is a newcomer to the list of companies with an A or better for 75 years. Massachusetts Mutual Life, Mass- Mutual Financial Group s lead company, accounts for about 90% of consolidated insurance assets, and is focused on marketing the group s traditional whole life products through its career agency force. The company was incorporated on May 15, 1851, in Massachusetts. Teachers Insurance & Annuity Association of America, which has had an A++ rating since 1964, recently joined the life/health companies with an A rating or better for 50 years. The company, whose wholly owned insurance subsidiary is TIAA-CREF Life Insurance Co., was established in 1918 as a legal reserve life insurance company under the insurance laws of the State of New York by the Carnegie Foundation for the Advancement of Teaching. (Continued on page 6)

4 Higher for 50 Years Alfa Mutual Insurance Company A AMCO Insurance Company A+ American Cas Co Reading, PA A American Economy Insurance Co A American Family Mutual Ins Co A American Home Assurance Co A American Security Insurance Co A American States Ins Co of TX A Associated Indemnity Corp A Barnstable County Mut Ins Co A Bay State Insurance Company A+ Bear River Mutual Ins Co A Church Mutual Insurance Co A Cincinnati Insurance Company A+ Commerce and Industry Ins Co A Continental Western Ins Co A+ Economy Fire & Casualty Co A Farm Bureau Mutual Ins of ID A+ Farm Bureau Prop & Cas Ins Co A Farmers Automobile Ins Assn A Farmers Mutual Hail Ins of IA A First National Ins Co of Amer A Generali USB A Great American Assurance Co A+ Great American Insurance Co. NY A+ Hastings Mutual Insurance Co A Kentucky Farm Bureau Mutual A Lightning Rod Mutual Ins Co A Merchants Bonding Co. (Mutual) A Midwestern Indemnity Company A Mount Vernon Fire Ins Co A++ Mountain West Farm Bureau Mut A National Fire & Marine Ins Co A++ National Indemnity Company A++ Netherlands Insurance Co A North Carolina Farm Bureau Mut A North Star Mutual Ins Co A+ Pennsylvania Insurance Company A+ Philadelphia Contrib Ins Co A+ Pioneer State Mutual Ins Co A+ Safeco Ins Co of America A Standard Guaranty Ins Co A State Auto Prop & Cas Ins Co A Continued on page 5 Best s Ratings This Rating History Project is based on Best s Financial Strength Ratings. A Best s Financial Strength Rating is an independent opinion of an insurer s financial strength and ability to meet its ongoing insurance policy and contract obligations. The rating is based on a comprehensive quantitative and qualitative evaluation of a company s balance sheet strength, operating performance and business profile. A.M. Best Company was founded in 1899 with the purpose of performing a constructive and objective role in the insurance industry toward the prevention and detection of insurer insolvency. This mission led to the development of Best s Ratings, which are now recognized worldwide as the benchmark of assessing insurers financial strength. Best s ratings opinions reflect an in-depth understanding of business fundamentals garnered from more than 100 years of focusing solely on the insurance industry. This is one reason why insurance industry professionals have consistently ranked Best s Ratings No. 1 in confidence, usefulness and understanding. A Best s Rating is an independent third-party evaluation that subjects all insurers to the same rigorous criteria, providing a valuable benchmark for comparing insurers, regardless of their country of domicile. Such a benchmark is increasingly important to an international market that looks for a strong indication of stability in the face of widespread deregulation, mergers, acquisitions and other dynamic factors.

5 Higher for 50 Years Continued from page 4 State Farm Cty Mutual of TX A++ Swiss Reinsurance America Corp A+ Tennessee Farmers Mutual Ins A+ Texas Pacific Indemnity Co A++ Transportation Insurance Co A Union Insurance Company A+ United States Liability Ins Co A++ Universal Surety Company A Universal Underwriters Ins Co A+ Valley Forge Insurance Co A Vigilant Insurance Company A++ Western Reserve Mutual Cas A Life/Health Insurers Higher for 50 Years American National Ins Co A American United Life Ins Co A+ Banner Life Ins Co A+ Canada Life Assurance Co A+ Great-West Life Assurance Co A+ Guardian Life Ins Co of Amer A++ Kansas City Life Ins Co A Liberty National Life Ins Co A+ Lincoln National Life Ins Co A+ Manufacturers Life Ins Co A+ Minnesota Life Ins Company A+ Nationwide Life Ins Co A+ Ohio National Life Insurance Co A+ Pacific Life Insurance Company A+ Protective Life Ins Co A+ ReliaStar Life Insurance Co A State Farm Life Ins Co A++ Sun Life Assur Co of Canada A+ Teachers Ins & Annuity Assoc A++ United Farm Family Life Ins Co A United of Omaha Life Ins Co A+ United States Life Ins of NY A Anniversary BestMark A.M. Best Co. has a program to recognize insurance companies that have maintained a financial strength rating of A or higher for at least 25 years. The Anniversary BestMark program consists of a special icon distinct from the standard BestMark that incorporates the company s name and acknowledges the year a company first achieved the financial strength rating of A. Print and Internetcompatible versions of the icon will be supplied. Eligible companies can use this icon in a manner similar to the current BestMark for example, on their websites, in print and online advertising, and on the cover of Best s Rating Report reprints. Eligible companies may request an Anniversary BestMark via to bestmarkinsurers@ ambest.com or phone call to A.M. Best, , ext

6 (Continued from page 3) 108-Year Tradition For 108 years, A.M. Best Company has been issuing financial strength ratings or opinions on the ability of individual insurers to pay claims on the coverage they have underwritten. A select group of carriers has consistently maintained strong financial strength ratings for the past 50 and 75 years, despite recessions, catastrophes and other perils. To identify the companies with the longest record of consistent financial strength, Best s analysts pored over the rating agency s proprietary data primarily Best s Key Rating Guides and Best s Insurance Reports to accumulate and verify ratings and other pertinent data dating back to A.M. Best s Rating Scale has changed over time in an ongoing effort to increasingly distinguish the relative financial strength of insurers and adapt to changes in the insurance industry. Therefore, in certain circumstances it was necessary to translate or convert various older ratings to conform to the present rating scale. (Note that these translations do not represent any material change or re-evaluation of a company s rating; they are merely a conversion from one scale to another). The original rating system, implemented in 1906, was devised by the company s founder, Alfred M. Best. In 1921, a new rating scale, General Policyholders Ratings, replaced the previously used Desirability Ratings, which applied only to property/casualty insurers. Desirability Ratings consisted of two components: a loss-paying record, ranked on an alpha scale with A being the best; and a rating of management quality, ranked on a numeric scale with 1 being the best. An Evolving Process The rating scale adopted in 1932 had two components: the New Resources Rating, the forerunner of today s Financial Size Category; and the General Policyholders Rating, which evolved into today s Financial Strength Ratings. From 1935 through 1975, A.M. Best did not assign letter ratings to life/health companies. Instead they had comments. In order to complete this rating history project, a translation was devised to convert these comments to equivalent letter ratings. For example, from 1935 to 1952, More than Ample was found to be equivalent to today s A rating. BR