AM Best Affirms Credit Ratings of United Fire Group, Inc. and Its Property/Casualty Subsidiaries
AM Best has affirmed the Financial Strength Rating (FSR) of A- (Excellent) and the Long-Term Issuer Credit Ratings (Long-Term ICR) of "a-" (Excellent) for the property/casualty subsidiaries of United Fire Group, Inc. (UFG) [NASDAQ: UFCS]. The outlook for these ratings is stable. The ratings reflect United Fire & Casualty Group's very strong balance sheet strength, marginal operating performance, neutral business profile, and appropriate enterprise risk management.
The stable outlook is based on AM Best's expectation of stabilization in the group's operating performance and balance sheet strength. The group benefits from a well-established position in core markets, offering diversified commercial lines products. However, it remains exposed to potential catastrophe and weather-related losses.
AM Best ha confermato il Rating di Forza Finanziaria (FSR) di A- (Eccellente) e i Rating di Credito dell'Emittente a Lungo Termine (Long-Term ICR) di "a-" (Eccellente) per le controllate nel settore proprietà/incidenti di United Fire Group, Inc. (UFG) [NASDAQ: UFCS]. L'outlook per questi rating è stabile. I rating riflettono la straordinaria solidità patrimoniale del gruppo United Fire & Casualty, una performance operativa marginale, un profilo aziendale neutro e una gestione del rischio d'impresa adeguata.
L'outlook stabile si basa sulle aspettative di AM Best riguardo alla stabilizzazione della performance operativa e della solidità patrimoniale del gruppo. Il gruppo beneficia di una posizione ben consolidata nei mercati core, offrendo prodotti diversificati nei settori commerciali. Tuttavia, rimane esposto a potenziali perdite dovute a catastrofi e condizioni meteorologiche avverse.
AM Best ha confirmado la calificación de fortaleza financiera (FSR) de A- (Excelente) y las calificaciones de crédito del emisor a largo plazo (Long-Term ICR) de "a-" (Excelente) para las filiales de propiedad/accidentes de United Fire Group, Inc. (UFG) [NASDAQ: UFCS]. La perspectiva para estas calificaciones es estable. Las calificaciones reflejan la muy sólida situación financiera del grupo United Fire & Casualty, un rendimiento operativo marginal, un perfil comercial neutral y una gestión de riesgos empresariales adecuada.
La perspectiva estable se basa en la expectativa de AM Best de estabilización en el rendimiento operativo del grupo y la solidez del balance. El grupo se beneficia de una posición bien establecida en los mercados principales, ofreciendo productos de líneas comerciales diversificadas. Sin embargo, sigue expuesto a posibles pérdidas por catástrofes y fenómenos meteorológicos.
AM Best는 A- (우수함)의 재무 건전성 등급(FSR)과 "a-" (우수함)의 장기 발행자 신용 등급(Long-Term ICR)을 United Fire Group, Inc. (UFG) [NASDAQ: UFCS]의 재산/사고 자회사에 대해 확인했습니다. 이 등급의 전망은 안정적입니다. 이 등급은 United Fire & Casualty 그룹의 아주 강력한 자산 구조, 약간의 운영 성과, 중립적인 비즈니스 프로필 및 적절한 기업 위험 관리 를 반영합니다.
안정적인 전망은 AM Best가 그룹의 운영 성과와 자산 구조의 안정화를 기대하고 있다는 데 기반합니다. 이 그룹은 핵심 시장에서 잘 확립된 위치를 갖추고 있으며, 다양한 상업용 라인 제품을 제공합니다. 그러나 여전히 재해 및 기후 관련 손실의 잠재적인 위험에 노출되어 있습니다.
AM Best a confirmé la notation de solidité financière (FSR) de A- (Excellent) et les notes de crédit à long terme de l'émetteur (Long-Term ICR) de "a-" (Excellent) pour les filiales de propriété/risque de United Fire Group, Inc. (UFG) [NASDAQ: UFCS]. Les perspectives de ces notations sont stables. Les notations reflètent la très grande solidité bilancielle du groupe United Fire & Casualty, une performance opérationnelle marginale, un profil commercial neutre et une gestion des risques d'entreprise adéquate.
Les perspectives stables sont basées sur l'attente d'AM Best d'une stabilisation de la performance opérationnelle et de la solidité bilancière du groupe. Le groupe bénéficie d'une position bien établie sur ses marchés principaux, offrant des produits diversifiés dans les lignes commerciales. Cependant, il reste exposé à des pertes potentielles dues à des catastrophes et des conditions météorologiques.
AM Best hat die Finanzstärke-Bewertung (FSR) von A- (Ausgezeichnet) und die Langfristigen Emittenten-Kreditratings (Long-Term ICR) von "a-" (Ausgezeichnet) für die Sach- und Unfalltochtergesellschaften von United Fire Group, Inc. (UFG) [NASDAQ: UFCS] bestätigt. Der Ausblick für diese Ratings ist stabil. Die Ratings spiegeln die sehr starke Bilanzkraft der United Fire & Casualty Group, die marginale operative Leistung, das neutrale Geschäftsprofil und das angemessene Risikomanagement wider.
Der stabile Ausblick basiert auf der Erwartung von AM Best, dass sich die operative Leistung und die Bilanzkraft der Gruppe stabilisieren werden. Die Gruppe profitiert von einer gut etablierten Position in Kernmärkten, die diversifizierte kommerzielle Produktlinien anbietet. Dennoch bleibt sie potenziellen Katastrophen und wetterbedingten Verlusten ausgesetzt.
- AM Best affirmed A- (Excellent) Financial Strength Rating for UFG's property/casualty subsidiaries
- Very strong balance sheet strength assessment
- Well-established position in core markets with diversified commercial lines offerings
- Solid regional franchise and long-standing agency relationships
- Marginal operating performance
- Exposure to potential catastrophe and weather-related losses
- Need to carefully manage rate and underwriting risk to improve operating performance
Insights
AM Best's affirmation of United Fire Group's (UFG) ratings with a stable outlook is a neutral development for investors. The A- (Excellent) Financial Strength Rating and "a-" (Excellent) Long-Term Issuer Credit Ratings for UFG's P/C subsidiaries indicate strong financial health. However, the "marginal operating performance" assessment suggests room for improvement.
The "very strong" balance sheet strength is a positive factor, but investors should monitor the company's efforts to stabilize operating performance. UFG's diversified product offerings and solid regional franchise provide some competitive advantages. The
Investors should watch for improvements in UFG's ability to manage catastrophe and weather-related losses, as well as its success in implementing strategic initiatives to enhance operating performance. The stable outlook suggests AM Best expects no significant deterioration in the near term, but progress in addressing these challenges will be important for long-term investor confidence.
The affirmation of UFG's ratings by AM Best highlights the company's financial resilience in a challenging insurance market. The "very strong" balance sheet assessment is particularly noteworthy, indicating robust capital adequacy to withstand potential shocks.
However, the "marginal operating performance" classification is a concern. This suggests UFG may be struggling with profitability issues, possibly due to high claims ratios or inefficient operations. The company's exposure to catastrophe and weather-related losses is a key risk factor that requires careful management.
UFG's diversified product range and strong regional presence are competitive strengths. The company's long-standing agency relationships could provide a stable distribution channel, potentially helping to maintain market share. Investors should monitor UFG's ability to leverage these advantages to improve its operating performance while maintaining its strong balance sheet position.
AM Best's assessment of UFG's enterprise risk management (ERM) as "appropriate" is reassuring but leaves room for enhancement. In the current volatile insurance landscape, robust ERM is important for navigating challenges like climate-related risks and market fluctuations.
The stable outlook suggests that UFG's risk management strategies are adequately addressing current threats. However, the company's exposure to catastrophe and weather-related losses remains a significant concern. UFG needs to demonstrate improved underwriting discipline and risk selection to mitigate these exposures.
Investors should pay attention to UFG's ability to balance growth with risk management. The company's strategic initiatives to improve operating performance will likely involve careful risk-reward trade-offs. Success in this area could lead to improved profitability without compromising the strong balance sheet, potentially resulting in more favorable ratings in the future.
The ratings reflect United Fire & Casualty Group’s balance sheet strength, which AM Best assesses as very strong, as well as its marginal operating performance, neutral business profile and appropriate enterprise risk management.
The stable outlooks reflect AM Best’s expectation of stabilization in United Fire & Casualty Group’s operating performance and balance sheet strength fundamentals over the intermediate term given management’s strategic initiatives intended to improve operating performance, as well as the adequacy of reserve development over time.
The ratings also consider the group’s well-established position within core markets that provide a diversified range of product offerings in commercial lines. The group also benefits from its solid regional franchise, local market knowledge, and long-standing agency relationships. Despite these strengths, the group remains exposed to potential catastrophe and weather-related losses and will need to manage rate and underwriting risk carefully to improve operating performance. The Long-Term ICR of UFG recognizes the capital strength of its operating subsidiaries. Financial leverage and interest coverage at the holding company is supportive of the current ratings.
The FSR of A- (Excellent) has been affirmed and the Long-Term ICRs of “a-” (Excellent) affirmed with stable outlooks for United Fire & Casualty Company and its following P/C subsidiaries:
- Lafayette Insurance Company
- Addison Insurance Company
- United Fire & Indemnity Company
- United Fire Lloyds
- Mercer Insurance Company
- Financial Pacific Insurance Company
-
Mercer Insurance Company of
New Jersey , Inc. - Franklin Insurance Company
- UFG Specialty Insurance Company
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.
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Gordon McLean
Senior Financial Analyst
+1 908 882 2109
gordon.mclean@ambest.com
Rosemarie Mirabella
Director
+1 908 882 2125
rosemarie.mirabella@ambest.com
Christopher Sharkey
Associate Director, Public Relations
+1 908 882 2310
christopher.sharkey@ambest.com
Al Slavin
Senior Public Relations Specialist
+1 908 882 2318
al.slavin@ambest.com
Source: AM Best
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