Market Overview

A.M. Best Upgrades Issuer Credit Ratings of Concord Group Insurance Pool Members; Affirms Credit Ratings of Auto-Owners Insurance Company and Certain Subsidiaries

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A.M. Best has upgraded the Long-Term Issuer Credit Ratings
(Long-Term ICR) to "a+" from "a" and affirmed the Financial Strength
Rating (FSR) of A (Excellent) of the members of Concord Group Insurance
Pool (Concord Group), which is led by Concord General Mutual
Insurance Company (Concord General) (Concord, NH). The outlook of the
Long-Term ICRs has been revised to stable from positive, while the
outlook for the FSR remains stable. (See below for a detailed listing of
the companies). Concurrently, A.M. Best has affirmed the FSR of A++
(Superior) and the Long-Term ICR of "aa+" of Auto-Owners Insurance
Company (Auto-Owners) and its four wholly owned property/casualty (P/C)
companies that comprise Auto-Owners Insurance Group (AOIG). (See below
for a detailed list.) Also, A.M. Best has affirmed the FSR of A
(Excellent) and the Long-Term ICR of "a+" of Atlantic Casualty Insurance
Company (Atlantic Casualty) (Goldsboro, NC). In addition, A.M.
Best has affirmed the FSR of A+ (Superior) and the Long-Term ICR of
"aa-" of Auto-Owners Life Insurance Company (AOLIC), also a
wholly owned subsidiary of Auto-Owners. The outlook of these Credit
Ratings (ratings) is stable. All of the companies are domiciled in
Lansing, MI, unless otherwise noted.

The ratings of Concord Group reflect its balance sheet strength, which
A.M. Best categorizes as very strong, as well as its adequate operating
performance, neutral business profile and appropriate enterprise risk
management (ERM).

The rating actions reflect significant operating and financial benefits
that Concord Group has realized as a result of its April 2017
affiliation with Auto-Owners, which is a highly rated, super-regional
insurer with more than $10 billion in policyholders' surplus. In
addition to achieving efficiencies and savings from scale, Concord Group
is benefiting from Auto-Owners' expertise and support in a number of
areas, including underwriting, claims, actuarial, product development,
information technology and risk management. Furthermore, Auto-Owners
provides Concord Group with a comprehensive excess of loss reinsurance
program and centralized investment management.

The ratings of AOIG reflect its balance sheet strength, which A.M. Best
categorizes as strongest, as well as its very strong operating
performance, favorable business profile and appropriate ERM.

AOIG has exhibited generally improved underwriting and operating
performance over the past six years. AOIG also maintains a business
profile that is balanced between personal and commercial lines and P/C
business. Through its acquisition of Atlantic Casualty in 2016 and its
affiliation with Concord General in 2017, Auto-Owners has further
broadened its business profile from a product and geographic
perspective. These positive rating factors are offset partially by its
exposure to credit risk associated with the Michigan Catastrophic Claims
Association.

The ratings of Atlantic Casualty reflect its balance sheet strength,
which A.M. Best categorizes as strongest, as well as its adequate
operating performance, neutral business profile and appropriate ERM.

Since its acquisition, Auto-Owners has increasingly supported Atlantic
Casualty in various functions including, but not limited to: actuarial
services, product development, reinsurance, claims, marketing and
information technology. The ratings also reflect Atlantic Casualty's
improved operating performance, especially over the past three years.

The ratings of AOLIC reflect its balance sheet strength, which A.M. Best
categorizes as very strong, as well as its strong operating performance,
neutral business profile and appropriate ERM.

The ratings also reflect AOLIC's integral role and positive contribution
to its P/C parent organization, diversified product portfolio, its
favorable level of risk-adjusted capitalization and high quality
investment portfolio. In addition to these rating factors, the company's
solid and steady operating results partially offset its geographical
business concentration risk.

The Long-Term ICRs have been upgraded to "a+" from "a" and the FSR of A
(Excellent) has been affirmed for the following members of Concord Group
Insurance Pool. The outlook of the Long-Term ICRs has been revised to
stable from positive, while the FSR outlook remains stable.

  • Concord General Mutual Insurance Company
  • Green Mountain Insurance Company, Inc.
  • State Mutual Insurance Company
  • Sunapee Mutual Fire Insurance Company
  • Vermont Accident Insurance Company, Inc.

The FSR of A++ (Superior) and the Long-Term ICRs of "aa+" have been
affirmed, each with a stable outlook, for Auto-Owners Insurance Company
and its wholly owned subsidiaries:

  • Home-Owners Insurance Company
  • Owners Insurance Company
  • Property-Owners Insurance Company
  • Southern-Owners Insurance Company

This press release relates to Credit Ratings that have been published
on A.M. 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 A.M. Best's
Recent
Rating Activity
web page. For additional information
regarding the use and limitations of Credit Rating opinions, please view
Understanding
Best's Credit Ratings
. For information on the proper media
use of Best's Credit Ratings and A.M. Best press releases, please view
Guide
for Media - Proper Use of Best's Credit Ratings and A.M. Best Rating
Action Press Releases
.

A.M. Best is a global rating agency and information provider with a
unique focus on the insurance industry. Visit
www.ambest.com
for more information
.

Copyright © 2018 by A.M. Best Rating Services, Inc. and/or its
affiliates. ALL RIGHTS RESERVED.

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