A.M. Best Co. has upgraded the financial strength rating to A
(Excellent) from B (Fair) and the issuer credit rating to "a+" from
"bb+" of Austin Mutual Insurance Company (Austin) (Maple Grove,
MN). The outlook for both ratings has been revised to stable from
The upgrades are due to the increase in Austin's intercompany quota
share reinsurance agreement from 35% to 100% as of January 1, 2013, with
the lead company of Main Street America Group, NGM Insurance
Company, having become a fully reinsured member.
A.M. Best does not expect to downgrade (or place a negative outlook on)
the ratings of Austin in the near to mid-term. However, such actions
would ensue if the company's relationship with the Main Street America
Group, (mst specifically its intercompany reinsurance arrangements)
were to incur material changes or have a severe reduction in Austin's
capitalization due to an increased credit leverage of its reinsured book
of business in the event of a catastrophe.
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. Key criteria utilized include: "Risk
Management and the Rating Process for Insurance Companies"; "Rating
Members of Insurance Groups"; and "Understanding BCAR for
Property/Casualty Insurers." Best's Credit Rating Methodology can be
found at www.ambest.com/ratings/methodology.
Founded in 1899, 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
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