OLDWICK, N.J.--(BUSINESS WIRE)--
A.M. Best Co. has upgraded the financial strength rating (FSR) to
A (Excellent) from A- (Excellent) and issuer credit ratings (ICR) to “a”
from “a-” of Eastern Alliance Insurance Group(EAIG) and its
members. EAIG consists of Eastern Alliance Insurance Company
(EAIC), Allied Eastern Indemnity Company (AEIC), Eastern
Advantage Assurance Company (EAAC) and Employers Security
Insurance Company (ESIC) (Indianapolis, IN), which operate under an
intercompany pooling agreement. Concurrently, A.M. Best has upgraded the
ICR to “bbb” from “bbb-” of the holding company, Eastern Insurance
Holdings, Inc.(EIHI) [NASDAQ: EIHI]. The outlook for all ratings
has been revised to stable from positive. All companies are domiciled in
Lancaster, PA, unless otherwise specified.
The ratings recognize EAIG’s strong operating results, excellent
capitalization, conservative reserving practices and the financial
flexibility afforded by EIHI. The cultivation of a loyal agency base
within preferred territories has produced profitable growth as evidenced
by the group’s five-year average combined ratio, which outperforms the
workers’ compensation composite by a wide margin. The strong
underwriting performance reflects management’s commitment to maintain
sound pricing, a proactive return to work program and utilization of
“compromise and release” agreements. This approach has allowed EAIG to
close claims more quickly and at a lower average cost than the typical
workers’ compensation writer.
Partially offsetting these positive factors is EAIG’s product
concentration as a monoline workers’ compensation writer, which
potentially exposes it to increased risk of regulatory or legislative
changes. In addition, adverse development isolated to EIHI’s run-off
specialty reinsurance segment, Eastern Re Ltd. S.P.C., required a
reallocation of capital within the organization in 2009 to strengthen
the run-off operation.
For Best’s Credit Ratings, an overview of the rating process and rating
methodologies, please visit www.ambest.com/ratings.
The principal methodologies used in determining these ratings, including
any additional methodologies and factors that may have been considered,
can be found at www.ambest.com/ratings/methodology.
Founded in 1899, A.M. Best Company is a global full-service credit
rating organization dedicated to serving the financial and health care
service industries, including insurance companies, banks, hospitals and
health care system providers. 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
or
Michelle
Baurkot, 908-439-2200, ext. 5507
michelle.baurkot@ambest.com
or
Public
Relations
Rachelle Morrow, 908-439-2200, ext. 5378
rachelle.morrow@ambest.com
or
Jim
Peavy, 908-439-2200, ext. 5644
james.peavy@ambest.com