A.M. Best Assigns Ratings to First Mercury Group
A.M. Best Co. has assigned the financial strength rating (FSR) of A- (Excellent) and issuer credit ratings (ICR) of "a-" to the newly formed pool, First Mercury Group (First Mercury) (Chicago, IL) and its members. The group consists of First Mercury Insurance Company (FMIC), which previously had a stand-alone FSR of A- (Excellent) and All Nation Insurance Company (ANIC), which previously had a stand-alone FSR of B+ (Good). The outlook for all ratings is stable.
ADVERTISEMENT
These rating actions reflect First Mercury's excellent capitalization and the financial flexibility derived from its affiliation with its parent, First Mercury Financial Corporation (NYSE: FMR - News), following FMR's successful initial public offering (IPO) in 2006. The IPO raised nearly $174 million, which was used to repay debt, return a portion of capital to original investors and to infuse $20 million into FMIC. In addition, the parent contributed an additional $20 million to FMIC at year-end following FMR's issuance of $25 million in trust preferred securities. The ratings also recognize the improvement in First Mercury's underwriting and operating performance over the current five-year period.
These positive rating factors are somewhat offset by continued adverse development, the relatively high but improving statutory expense ratio and the inherent risks associated with the recent growth in premium production.
The newly formed pool reflects the implementation of an intercompany pooling agreement on May 3, 2007, effective January 1, 2007, wherein all premiums, losses and expenses of FMIC and ANIC, including all past liabilities, are combined and apportioned between FMIC and ANIC along fixed percentages.
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: OLDWICK, N.J.--(BUSINESS WIRE)-- | Published on May 4, 2007
Are you retail Agent Looking for a Quote?