OLDWICK, N.J.--(BUSINESS WIRE)--
A.M. Best Co. has affirmed the financial strength rating (FSR) of
A (Excellent) and issuer credit ratings (ICR) of “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 affirmed the ICR of “bbb” of the holding
company, Eastern Insurance Holdings, Inc. (EIHI) [NASDAQ: EIHI].
The outlook for all ratings is stable. All companies are domiciled in
Lancaster, PA, unless otherwise specified.
The ratings recognize EAIG’s strong operating results, excellent
capitalization, prudent 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 rating factors is EAIG’s product
concentration as a monoline workers’ compensation writer, which
potentially exposes it to increased risk of regulatory or legislative
changes, as well as the execution risk associated with continued
expansion initiatives.
The principal methodology used in determining these ratings is Best’s
Credit Rating Methodology -- Global Life and Non-Life Insurance Edition,
which provides a comprehensive explanation of A.M. Best’s rating process
and highlights the different rating criteria employed. Additional key
criteria utilized include: “Risk Management and the Rating Process for
Insurance Companies”; “Understanding BCAR for Property/Casualty
Insurers”; “Rating Members of Insurance Groups”; and “The Treatment of
Terrorism Risk in the Rating Evaluation.” Methodologies 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 © 2011 by A.M. Best Company, Inc.ALL RIGHTS
RESERVED.
Source: A.M. Best Company, Inc.
Contact:
A.M. Best Company, Inc.
Charles Meyer, 908-439-2200, ext.
5374
Senior Financial Analyst
charles.meyer@ambest.com
or
Michelle
Baurkot, ARe, ARM, 908-439-2200, ext. 5507
Assistant Vice
President
michelle.baurkot@ambest.com
or
Rachelle
Morrow, 908-439-2200, ext. 5378
Senior Manager, Public
Relations
rachelle.morrow@ambest.com
or
Jim
Peavy, 908-439-2200, ext. 5644
Assistant Vice President,
Public Relations
james.peavy@ambest.com