A.M. Best Affirms Ratings of State Auto Insurance Companies
19 April 2008 - 12:27AM
Business Wire
A.M. Best Co. has affirmed the financial strength rating (FSR) of
A+ (Superior) and issuer credit ratings (ICR) of �aa-� of State
Auto Insurance Companies (State Auto) and its members. A.M. Best
also has affirmed the ICR of �a-� and debt rating of �a-� on $100
million 6.25% senior unsecured notes issued by State Auto Financial
Corporation [NASDAQ: STFC]. All the above named companies are
domiciled in Columbus, OH. The outlook for all ratings is stable.
(See below for a detailed listing of the companies and ratings.)
The ratings reflect State Auto�s strong capitalization, favorable
operating performance and excellent regional market franchise.
These attributes reflect its long-standing regional market
presence, well-established agency relationships, strong brand name
recognition, diversified product offerings and adherence to sound
underwriting fundamentals. Somewhat offsetting these positive
rating factors is the group�s exposure to localized storms and an
earthquake stemming from the New Madrid fault in the Midwest, along
with hurricane activity in the southeastern United States. In
addition, State Auto has debt servicing requirements due to the
above mentioned debt issuance, which could put a strain on future
earnings. However, State Auto has continued to emphasize
disciplined underwriting, pricing and claims processes. As a result
of this strategy, State Auto has reported favorable operating
results in each of the past five years. The FSR of A+ (Superior)
and the ICRs of �aa-� have been affirmed for State Auto Insurance
Companies and its following members: State Auto Florida Insurance
Company Patrons Mutual Insurance Company of Connecticut Litchfield
Mutual Fire Insurance Company Beacon National Insurance Company
Beacon Lloyds Insurance Company Farmers Casualty Insurance Company
Milbank Insurance Company State Auto Property and Casualty
Insurance Company State Auto Insurance Company of Wisconsin State
Auto National Insurance Company State Automobile Mutual Insurance
Company State Auto Insurance Company of Ohio Meridian Citizens
Mutual Insurance Company Meridian Security Insurance Company The
ICR of �a-� has been affirmed for State Auto Financial Corporation.
The following debt rating has been affirmed: State Auto Financial
Corporation� -- �a-� on $100 million 6.25% senior unsecured notes,
due 2013 For Best�s Debt Ratings, all other 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 global full-service credit rating organization dedicated to
serving the financial and health care service industries, including
insurance companies, banks, hospitals and health care system
providers. For more information, visit www.ambest.com.
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