TEXT-S&P affirms Employers Mutual Casualty 'BBBpi' rtgs
Sept 7 - Rating Action On Aug. 31, 2012, Standard & Poor's Ratings Services affirmed its 'BBBpi' counterparty credit and financial strength ratings on Employers Mutual Casualty Co. and related pool members (see list below), and its reinsurance subsidiary, EMC Reinsurance Co. The companies are members of EMC Insurance Cos. Group and, with the exception of EMC Reinsurance, participate in an interaffiliate pooling agreement, so we rate them as a group. Rationale The ratings reflect the pooling members' and EMC Reinsurance's strong capitalization and well-diversified business mix. Underwriting results that are susceptible to severe weather events and catastrophes partially offset these positive factors. The group's underwriting results have varied in recent years as evidenced by a combined ratio that has ranged from 98% in 2007 to 116% in 2011. The group reported a five-year (2007-2011) average combined ratio and return on revenue of 106% and 5%, respectively. The group's liquidity position is an added rating constraint. Employers Mutual has 62% of the interaffiliate pooling agreement, EMCASCO Insurance Co. has 13.5%, Illinois EMCASCO Insurance Co. has 10%, Dakota Fire Insurance Co. has 6.5%, Hamilton Mutual Insurance Co. has 2%, EMC Property & Casualty Insurance Co. has 3.5%, and Union Insurance Co. of Providence has 2.5%. The group is one of the largest multiple-line property/casualty mutual insurance entities in Iowa and was organized in 1911. The group is based in Des Moines, Iowa, and had net premiums written of more than $1.2 billion in 2011. It provides products and services throughout the U.S. and is licensed in all 50 states and the District of Columbia. The group's major lines of business are auto liability, workers' compensation, and other liability insurance. Related Criteria And Research Ratings Bearing A "pi" Subscript: Methodology And Assumptions, Feb. 9, 2011 Ratings List Ratings Affirmed Employers Mutual Casualty Co. (Unsolicited Ratings) Union Insurance Co. of Providence (Unsolicited Ratings) Illinois Emcasco Insurance Co. (Unsolicited Ratings) Hamilton Mutual Insurance Co. of Cincinnati (Unsolicited Ratings) Emcasco Insurance Co. (Unsolicited Ratings) EMC Reinsurance Co. (Unsolicited Ratings) EMC Property & Casualty Insurance Co. (Unsolicited Ratings) Dakota Fire Insurance Co. (Unsolicited Ratings) Counterparty Credit Rating Local Currency BBBpi/--/-- Financial Strength Rating Local Currency BBBpi/--/-- This unsolicited rating(s) was initiated by Standard & Poor's. It may be based solely on publicly available information and may or may not involve the participation of the issuer. Standard & Poor's has used information from sources believed to be reliable based on standards established in our Credit Ratings Information and Data Policy but does not guarantee the accuracy, adequacy, or completeness of any information used. Complete ratings information is available to subscribers of RatingsDirect on the Global Credit Portal at www.globalcreditportal.com. All ratings affected by this rating action can be found on Standard & Poor's public Web site at www.standardandpoors.com. Use the Ratings search box located in the left column.
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