Best Ratings Report

Editor's note: This information is courtesy of A.M. Best Co.
For further information, visit www.ambest.com/ratings.

A.M. Best Co. has affirmed the financial strength rating (FSR) of A- (Excellent) and issuer credit ratings (ICR) of “a-” of PMA Insurance Group (Blue Bell, PA) and its pooled members, Pennsylvania Manufacturers’ Association Insurance Company, Pennsylvania Manufacturers Indemnity Company and Manufacturers Alliance Insurance Company.

Concurrently, A.M. Best has affirmed the ICR of “bb” and debt ratings of the parent, PMA Capital Corporation (PMA Capital) (Blue Bell, PA) [NASDAQ: PMACA]. The outlook for all the above ratings is stable. (See link below for a detailed listing of the companies and ratings.)

The ratings reflect PMA Insurance Group’s supportive capitalization, improved operating profitability in recent years and strong regional workers’ compensation market presence. Partially offsetting these positive rating factors is recent growth in both premium and reserves, which has outpaced growth in surplus, as well as A.M. Best’s concern with the group’s ability to sustain the recent improvement in operating performance given softening market conditions.

Also, given that PMA Insurance Group represents PMA Capital’s largest ongoing business segment, the group’s capitalization could potentially be impacted by holding company and debt servicing obligations. Despite these concerns, the outlook reflects A.M. Best’s expectation for solid underwriting performance and continued supportive overall capitalization.

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A.M. Best Co. has assigned a financial strength rating (FSR) of B++ (Good) and issuer credit rating (ICR) of “bbb+” to Echelon General Insurance Company (Echelon General) (Mississauga, Ontario). Concurrently, A.M. Best has assigned an ICR of “bb+” to Echelon General’s publicly traded parent, EGI Financial Holdings Inc. (EGIFHI) (Mississauga, Ontario). The outlook assigned to all ratings is stable.

The ratings for Echelon General are reflective of its strong risk-adjusted capitalization and operating performance, improved product line and geographic diversification, experienced management team in the non-standard auto and niche product markets as well as the additional financial flexibility of EGIFHI.

These rating strengths are partially offset by Echelon General’s concentration in the Ontario non-standard auto market, strong competitive market pressure and an aggressive growth strategy.

Echelon General’s capitalization has greatly improved over the last five years due to better than average earnings and capital contributions. The management team has extensive experience and knowledge in the non-standard auto and niche product sectors and has successfully implemented a strategy of diversification with profitable growth. A.M. Best will continue to monitor Echelon General’s expansion and CIM Reinsurance Company Ltd., a Barbados affiliate.

However, A.M. Best is concerned about EGIFHI’s aggressive growth plans in the U.S. and Canadian non-standard auto and niche product markets. EGIFHI is a Canadian holding company whose common shares are publicly traded on the Toronto Stock Exchange (EFH). The ICR is based on the overall financial strength of its operating companies and the subordination of its creditors to the operating companies’ policyholders.