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AM Best Upgrades Credit Ratings of Forestry Mutual Insurance Company

·3 min read

OLDWICK, N.J., August 30, 2022--(BUSINESS WIRE)--AM Best has upgraded the Financial Strength Rating to A- (Excellent) from B++ (Good) and the Long-Term Issuer Credit Rating to "a-" (Excellent) from "bbb+" (Good) of Forestry Mutual Insurance Company (FMIC) (Raleigh, NC). The outlook of these Credit Ratings (ratings) has been revised to stable from positive.

The ratings reflect FMIC’s balance sheet strength, which AM Best assesses as very strong, as well as its adequate operating performance, limited business profile and appropriate enterprise risk management (ERM).

The ratings upgrade reflects the sustained improvement in FMIC’s balance sheet strength, which is supported by risk-adjusted capitalization at the strongest level, as measured by Best’s Capital Adequacy Ratio (BCAR). The improved assessment is the result of several factors: strong policyholder surplus growth over the past five-year period; solid liquidity metrics; favorable loss reserving trends; and the maintaining of a solid reinsurance program with a manageable retention. Further, surplus growth, coupled with a lower premium base, has led to declining underwriting leverage measures. AM Best expects that FMIC’s operating profitability will continue to increase the company’s surplus base prospectively.

The ratings also reflect FMIC’s adequate operating performance, which is supported by disciplined underwriting practices and a conservative investment strategy. The limited business profile reflects the company’s position as a monoline workers’ compensation writer for the logging and forestry industries, which exposes it to risks associated with the timber industry, such as changes in demand for wood products. AM Best considers the company’s ERM framework and risk management capabilities to be appropriate for its risk profile. FMIC is recognized for its aggressive safety and loss control processes, along with a commitment to long-term stability for its members.

This press release relates to Credit Ratings that have been published on AM Best’s website. For all rating information relating to the release and pertinent disclosures, including details of the office responsible for issuing each of the individual ratings referenced in this release, please see AM Best’s Recent Rating Activity web page. For additional information regarding the use and limitations of Credit Rating opinions, please view Guide to Best's Credit Ratings. For information on the proper use of Best’s Credit Ratings, Best’s Performance Assessments, Best’s Preliminary Credit Assessments and AM Best press releases, please view Guide to Proper Use of Best’s Ratings & Assessments.

AM Best is a global credit rating agency, news publisher and data analytics provider specializing in the insurance industry. Headquartered in the United States, the company does business in over 100 countries with regional offices in London, Amsterdam, Dubai, Hong Kong, Singapore and Mexico City. For more information, visit www.ambest.com.

Copyright © 2022 by A.M. Best Rating Services, Inc. and/or its affiliates. ALL RIGHTS RESERVED.

View source version on businesswire.com: https://www.businesswire.com/news/home/20220830005881/en/

Contacts

Adrienne Stark
Senior Financial Analyst
+1 908 439 2200, ext. 5526
adrienne.stark@ambest.com

Christopher Sharkey
Manager, Public Relations
+1 908 439 2200, ext. 5159
christopher.sharkey@ambest.com

Dan Teclaw
Associate Director
+1 908 439 2200, ext. 5394
dan.teclaw@ambest.com

Jeff Mango
Managing Director,
Strategy & Communications
+1 908 439 2200, ext. 5204
jeffrey.mango@ambest.com