Standing. Test. Time

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Issue

Sixty-three property/casualty insurers and 12 life/health carriers have maintained

a Best’s Financial Strength Rating of A or higher for at least 75 years.

Standing

The

Test

Of

Time

W

hen carriers reflect back on the prior year, they certainly have much reason to celebrate. Not only did property/casualty carriers enjoy their strongest financial perfor-mance since the 2007-2009 recession, they also dodged a bullet in what was the

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Monthly Insurance News Magazine

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Insurers • Agents & Brokers • Reinsurers

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sixth-least active Atlantic hurri-cane season since 1950, according to information from the Property/ Casualty Insurance Joint Industry Forum. Tornado activity in 2013 also ran far below the long-run U.S. average, despite a series of tornadoes in Oklahoma in May.

Life writers in the voluntary market also are coming off a good year. In 2013, life insurance sales in that market totaled $1.88 bil-lion—up 22% from the prior year, according to the marketing advi-sory firm Eastbridge Consulting Group.

Seventy-five insurance compa-nies—63 property/casualty carri-ers and 12 life/health insurcarri-ers— also had reason to revel in 2013. Each stood the test of time by retaining an A.M. Best credit rating of A or higher for at least 75 years.

Another group of 77 compa-nies—55 property/casualty writ-ers and 22 life/health carriwrit-ers— kept their A or higher rating intact for at least 50 consecutive years.

Property/casualty carriers Fed-eral Insurance Co., Hartford Fire Insurance Co. and New Hamp-shire Insurance Co. all have 108 consecutive years with an A or higher rating.

On the life/health side, Gen-worth Life and Annuity Insurance, Northwestern Mutual Life Insur-ance, Penn Mutual Life Insurance Co. and Prudential Insurance Company of America all had 87 consecutive years of an A or higher rating from A.M. Best.

In 2013, Otsego Mutual Fire Insurance. Co., Nationwide Mutual Fire Insurance Co. and State Farm Fire and Casualty Co. joined the list of 75 year-plus carriers on the P/C side.

Otsego Mutual Fire Insurance, incorporated on March 10, 1897, is one of the New York state stan-dard advance premium co-oper-ative fire insurance companies operating under provisions of

Company Name AMB#

Rated A or

Higher Since Current Rating

21st Century Pacific Ins Co. 002359 1936 A

AIG Property Casualty Co. 002349 1928 A

American Automobile Ins Co. 002176 1933 A American Insurance Company 002177 1934 A American States Insurance Co. 002287 1930 A Amica Mutual Insurance Co. 002162 1922 A++ Baltimore Equitable Society 003225 1933 A+ Cambridge Mutual Fire Ins Co. 002054 1935 A+ Continental Casualty Company 002128 1922 A COUNTRY Mutual Insurance Co. 002249 1931 A+

CSAA Insurance Exchange 000228 1927 A+

Erie Insurance Exchange 000348 1939 A+

Euler Hermes NA Insurance Co. 002097 1922 A+ Farmers Mutual Ins Co of NE 000371 1922 A Federal Insurance Company 002084 1907 A++

Federated Mutual Ins Co. 000384 1934 A+

Fidelity and Deposit Co of MD 000387 1922 A+ Fireman's Fund Insurance Co. 002179 1924 A

General Ins Co of America 002447 1926 A

General Reinsurance Corp 002198 1928 A++

Germantown Mutual Ins Co. 000414 1923 A

Granite State Insurance Co. 002360 1925 A Great American Insurance Co. 002213 1908 A+ Great Northern Insurance Co. 002085 1923 A++ Hartford Accident & Indem Co. 002230 1922 A

Hartford Casualty Ins Co. 002229 1930 A

Hartford Fire Insurance Co. 002231 1907 A Hartford Steam Boiler I & I 000465 1922 A++ Hartford Underwriters Ins Co. 002232 1926 A Illinois National Insurance Co. 002361 1937 A Insurance Co of the State PA 002035 1934 A Lititz Mutual Insurance Co. 000558 1932 A Merrimack Mutual Fire Ins Co. 002055 1920 A+

Montgomery Mutual Ins Co. 000662 1925 A

Munich Reinsurance America Inc. 000149 1923 A+ Mutual Assurance Society of VA 003260 1933 A+ National Fire Ins Hartford 002129 1914 A National Surety Corporation 002182 1937 A National Union Fire Ins Co PA 002351 1934 A Nationwide Mutual Fire Ins Co. 002357 1938 A+

Nationwide Mutual Ins Co. 002358 1929 A+

New Hampshire Insurance Co. 002363 1907 A New Jersey Manufacturers Ins 000694 1934 A++

Property/Casualty Insurers

Rated A or Higher for 75 Years

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the Article XI-B of the state insur-ance law. In 1942, the company merged with the Chemical Mutual Insurance Co. under the title and charter of the Otsego Mutual Fire Insurance Co.

Nationwide Mutual Fire incor-porated in Ohio in 1933 and began business the following year. Operations were conducted under the Farm Bureau Mutual Fire Insurance Co. from inception until Sept. 1, 1955, when the pres-ent corporate name was adopted. The company currently writes primarily personal lines, with homeowners representing more than 40% of its direct writings.

State Farm Fire and Casualty was organized in 1935 under the laws of Illinois and commenced business in June of that same year. The present title was adopted in 1950 when the company absorbed by merger the State Farm Casualty Co.

On the life/health side, Massa-chusetts Mutual Life, which has had an A++ rating since 1939, is a newcomer to the list of companies with an A or better for 75 years. Massachusetts Mutual Life, Mass-Mutual Financial Group’s lead com-pany, accounts for about 90% of consolidated insurance assets, and is focused on marketing the group’s traditional whole life products through its career agency force. The company was incorporated on May 15, 1851, in Massachusetts.

Teachers Insurance & Annuity Association of America, which has had an A++ rating since 1964, recently joined the life/health companies with an A rating or better for 50 years. The company, whose wholly owned insurance subsidiar y is TIAA-CREF Life Insurance Co., was established in 1918 as a legal reserve life insurance company under the insurance laws of the State of New York by the Carnegie Foundation for the Advancement of Teaching.

Rated A or

Columbus Life Insurance Co. 006244 1938 A+

COUNTRY Life Ins Co. 006294 1933 A+

Genworth Life and Annuity Ins 006648 1928 A Massachusetts Mutual Life Ins 006695 1939 A++

Metropolitan Life Ins Co. 006704 1928 A+

New York Life Ins Co. 006820 1928 A++

Northwestern Mutual Life Ins 006845 1928 A++

Penn Mutual Life Ins Co. 006903 1928 A+

Principal Life Insurance Co. 006150 1928 A+ Prudential Ins Co of America 006974 1928 A+ Standard Insurance Company 007069 1928 A Western and Southern Life Ins 007243 1928 A+

Source: A.M. Best Data. Ratings as of May 12, 2014.

Life/Health Insurers

Rated A or Higher for 75 Years

Rated A or

New York Central Mutual Fire 000700 1936 A+ Ohio Farmers Insurance Co. 002381 1935 A OneBeacon Insurance Company 002196 1934 A u Otsego Mutual Fire Ins Co. 003152 1938 A+ Pacific Indemnity Company 002385 1928 A++ Peerless Insurance Company 002394 1922 A Pharmacists Mutual Ins Co. 000320 1922 A Philadelphia Contrib for Ins 003112 1922 A+ Quincy Mutual Fire Ins Co. 000796 1922 A+ Selective Ins Co of America 000826 1930 A St. Paul Fire & Marine Ins Co. 002452 1926 A+ State Automobile Mutual Ins Co. 000855 1925 A State Farm Fire & Casualty Co. 002477 1939 A+ State Farm Mutual Auto Ins Co. 002479 1929 A++ Tri-State Insurance Co of MN 000918 1927 A+ Twin City Fire Insurance Co. 002235 1921 A United Services Auto Assn 000934 1927 A++

Western Surety Company 000974 1935 A

Westfield Insurance Company 002382 1934 A

Westport Insurance Corp. 000347 1922 A+

Property/Casualty Insurers

Rated A or Higher for 75 Years

Continued from page 2

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Best’s

Ratings

T

his Rating History Project is based on Best’s Financial Strength Ratings. A Best’s Finan-cial Strength Rating is an indepen-dent opinion of an insurer’s finan-cial strength and ability to meet its ongoing insurance policy and contract obligations. The rating is based on a comprehensive quan-titative and qualitative evaluation of a company’s balance sheet strength, operating performance and business profile.

A.M. Best Company was founded in 1899 with the purpose of performing a con-structive and objective role in the insurance industry toward the prevention and detection of insurer insolvency. This mis-sion led to the development of Best’s Ratings, which are now recognized worldwide as the benchmark of assessing insur-ers’ financial strength. Best’s rat-ings opinions reflect an in-depth understanding of business fun-damentals garnered from more than 100 years of focusing solely on the insurance industry. This is one reason why insurance industry professionals have con-sistently ranked Best’s Ratings No. 1 in confidence, usefulness and understanding.

A Best’s Rating is an inde-pendent third-party evaluation that subjects all insurers to the same rigorous criteria, providing a valuable benchmark for com-paring insurers, regardless of their country of domicile. Such a benchmark is increasingly important to an international market that looks for a strong indication of stability in the face of widespread deregulation, mergers, acquisitions and other dynamic factors.

Rated A or

Alfa Mutual Insurance Company 002005 1953 A

AMCO Insurance Company 002014 1960 A+

American Cas Co Reading, PA 002127 1949 A American Economy Insurance Co. 002286 1960 A American Family Mutual Ins Co. 002022 1939 A American Home Assurance Co. 002034 1944 A American Security Insurance Co. 002049 1952 A American States Ins Co of TX 002290 1956 A Associated Indemnity Corp. 002178 1939 A Barnstable County Mut Ins Co. 000203 1949 A Bay State Insurance Company 002053 1956 A+

Bear River Mutual Ins Co. 000209 1955 A

Church Mutual Insurance Co. 000259 1951 A Cincinnati Insurance Company 000258 1955 A+ Commerce and Industry Ins Co. 004000 1958 A Continental Western Ins Co. 000971 1951 A+ Economy Fire & Casualty Co. 002276 1939 A Farm Bureau Mutual Ins of ID 000355 1959 A+ Farm Bureau Prop & Cas Ins Co. 000354 1946 A Farmers Automobile Ins Assn. 002395 1960 A Farmers Mutual Hail Ins of IA 000372 1960 A First National Ins Co of Amer 002446 1929 A

Generali USB 003073 1957 A

Great American Assurance Co. 002004 1951 A+ Great American Insurance Co. NY 002210 1949 A+ Hastings Mutual Insurance Co. 000464 1961 A Kentucky Farm Bureau Mutual 000540 1949 A Lightning Rod Mutual Ins Co. 002284 1962 A Merchants Bonding Co. (Mutual) 000594 1958 A Midwestern Indemnity Company 002323 1956 A Mount Vernon Fire Ins Co. 002540 1960 A++ Mountain West Farm Bureau Mut 000986 1956 A National Fire & Marine Ins Co. 002428 1954 A++ National Indemnity Company 002429 1953 A++

Netherlands Insurance Co. 002393 1949 A

North Carolina Farm Bureau Mut 000708 1963 A

North Star Mutual Ins Co. 000714 1953 A+

Pennsylvania Insurance Company 002195 1956 A+ Philadelphia Contrib Ins Co. 003111 1961 A+ Pioneer State Mutual Ins Co. 000860 1962 A+

Safeco Ins Co of America 002448 1955 A

Standard Guaranty Ins Co. 002050 1962 A

State Auto Prop & Cas Ins Co. 002475 1954 A

Continued on page 5

Property/Casualty Insurers

Rated A or Higher for 50 Years

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Anniversary

BestMark

A

.M. Best Co. has a program to recognize insurance com-panies that have maintained a financial strength rating of A or higher for at least 25 years.

The Anniversary BestMark program consists of a special icon—distinct from the standard BestMark—that incorporates the company’s name and acknowl-edges the year a company first achieved the financial strength rating of A. Print and Internet-compatible versions of the icon will be supplied. Eligible com-panies can use this icon in a manner similar to the current BestMark—for example, on their websites, in print and online advertising, and on the cover of Best’s Rating Report reprints.

Eligible companies may request an Anniversary BestMark via email to bestmarkinsurers@

ambest.com or phone call to A.M.

Best, 908-439-2200, ext. 5373.

Rated A or

State Farm Cty Mutual of TX 002476 1961 A++ Swiss Reinsurance America Corp 003263 1945 A+ Tennessee Farmers Mutual Ins 000886 1954 A+ Texas Pacific Indemnity Co. 002386 1962 A++ Transportation Insurance Co. 002131 1941 A

Union Insurance Company 002532 1951 A+

United States Liability Ins Co. 002541 1955 A++

Universal Surety Company 002543 1952 A

Universal Underwriters Ins Co. 002297 1955 A+ Valley Forge Insurance Co. 002132 1950 A Vigilant Insurance Company 002086 1943 A++ Western Reserve Mutual Cas 002285 1960 A

Property/Casualty Insurers

Rated A or Higher for 50 Years

Continued from page 4

Rated A or

American National Ins Co. 006087 1941 A

American United Life Ins Co. 006109 1950 A+

Banner Life Ins Co. 006468 1963 A+

Canada Life Assurance Co. 006183 1939 A+

Great-West Life Assurance Co. 006493 1945 A+ Guardian Life Ins Co of Amer 006508 1947 A++

Kansas City Life Ins Co. 006605 1952 A

Liberty National Life Ins Co. 006629 1958 A+ Lincoln National Life Ins Co. 006664 1940 A+ Manufacturers Life Ins Co. 006688 1939 A+ Minnesota Life Ins Company 006724 1940 A+

Nationwide Life Ins Co. 006812 1954 A+

Ohio National Life Insurance Co. 006852 1964 A+ Pacific Life Insurance Company 006885 1959 A+

Protective Life Ins Co. 006962 1940 A+

ReliaStar Life Insurance Co. 006846 1945 A

State Farm Life Ins Co. 007080 1954 A++

Sun Life Assur Co of Canada 007101 1946 A+ Teachers Ins & Annuity Assoc 007112 1964 A++ United Farm Family Life Ins Co. 007168 1961 A United of Omaha Life Ins Co. 007164 1956 A+ United States Life Ins of NY 007192 1959 A

Life/Health Insurers

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108-Year Tradition

For 108 years, A.M. Best Company has been issu-ing financial strength ratissu-ings or opinions on the abil-ity of individual insurers to pay claims on the cover-age they have underwritten.

A select group of carriers has consistently main-tained strong financial strength ratings for the past 50 and 75 years, despite recessions, catastrophes and other perils.

To identify the companies with the longest record of consistent financial strength, Best’s analysts pored over the rating agency’s proprietary data—primar-ily Best’s Key Rating Guides and Best’s Insurance

Reports—to accumulate and verify ratings and other

pertinent data dating back to 1905.

A.M. Best’s Rating Scale has changed over time in an ongoing effort to increasingly distinguish the relative financial strength of insurers and adapt to changes in the insurance industry.

Therefore, in certain circumstances it was neces-sary to translate or convert various older ratings to conform to the present rating scale.

(Note that these translations do not represent any material change or re-evaluation of a company’s rat-ing; they are merely a conversion from one scale to another).

The original rating system, implemented in 1906, was devised by the company’s founder, Alfred M. Best.

In 1921, a new rating scale, General Policyhold-ers Ratings, replaced the previously used Desirabil-ity Ratings, which applied only to property/casualty insurers.

Desirability Ratings consisted of two components: a loss-paying record, ranked on an alpha scale with “A” being the best; and a rating of management quali-ty, ranked on a numeric scale with “1” being the best.

An Evolving Process

The rating scale adopted in 1932 had two com-ponents: the New Resources Rating, the forerunner of today’s Financial Size Category; and the General Policyholders Rating, which evolved into today’s Financial Strength Ratings.

From 1935 through 1975, A.M. Best did not assign letter ratings to life/health companies. Instead they had “comments.”

In order to complete this rating history project, a translation was devised to convert these “comments” to equivalent letter ratings. For example, from 1935 to 1952, “More than Ample” was found to be equivalent

to today’s “A” rating. BR