OLDWICK, N.J.--(BUSINESS WIRE)--
A.M. Best Co. has affirmed the financial strength rating (FSR) of
A- (Excellent) and the issuer credit rating (ICR) of "a-"of Eastern
Alliance Insurance Group (EAIG) and its members. The rating reflects
the combined results of Eastern Alliance Insurance Company (EAIC) and
Allied Eastern Indemnity Company (AEIC), which operate under an
intercompany pooling agreement. Concurrently, A.M. Best has affirmed
the ICR of "bbb-" of the holding company, Eastern Insurance Holdings,
Inc. (EHI) (NASDAQ: EIHI). The outlook for all ratings is stable. All
companies are domiciled in Lancaster, PA.
The ratings recognize EAIG's excellent capitalization, strong
underwriting profitability and diversified organizational structure
providing multiple revenue streams. EAIG provides managed care
workers' compensation products and services to employers in rural and
suburban Pennsylvania, Delaware and Maryland. The group benefits from
strong relationships with its agency force and maintains a local
market presence, enabling better service to its niche clients. The
group's five-year average combined ratio remains well below the
workers' compensation composite average as these strong results are
driven by improved pricing, declining claim frequency and a continued
focus on expense management. Additionally, the group has cultivated a
loyal agency base operating in preferred territories, which has driven
profitable growth. Lastly, financial leverage at the intermediate
holding company, Eastern Holding Company Ltd. (EHC), is minimal and
acceptable for the current rating level.
Partially offsetting these positive factors are the areas of
adverse loss reserve development that occurred in earlier accident
years, as well as the group's geographic and product concentration,
which potentially exposes it to increased risk of regulatory or
legislative changes. Despite these concerns, the rating outlook
reflects the group's focused underwriting, aggressive claims closure
rates and conservative reserving practices that have resulted in an
improvement in overall capitalization.
For Best's Ratings, an overview of the rating process and rating
methodologies, please visit www.ambest.com/ratings.
Founded in 1899, A.M. Best Company is a full-service credit rating
organization dedicated to serving the financial services industries,
including the banking and insurance sectors. For more information,
visit www.ambest.com.
Source: A.M. Best Co.
Contact: A.M. Best Co.
Analysts:
Gordon McLean, 908-439-2200, ext. 5304
gordon.mclean@ambest.com
Michelle Baurkot, 908-439-2200, ext. 5507
michelle.baurkot@ambest.com
or
Public Relations:
Jim Peavy, 908-439-2200, ext. 5644
james.peavy@ambest.com
Rachelle Morrow, 908-439-2200, ext. 5378
rachelle.morrow@ambest.com