A.M. Best Co. has affirmed the financial strength rating (FSR) of A+ (Superior) and issuer credit ratings (ICR) of “aa” of Cincinnati, Ohio-based standard market property/casualty group, The Cincinnati Insurance Companies (CIC) and its members.
A.M. Best also has affirmed the FSR of A (Excellent) and ICR of “a” of The Cincinnati Specialty Underwriters Insurance Co. (CSU) (Wilmington, Del.) and the ICR and debt ratings of “a” of Cincinnati Financial Corporation (CINF) (NASDAQ: CINF). CSU is the excess and surplus lines property/casualty subsidiary of CIC.
Concurrently, A.M. Best affirmed the FSR of A (Excellent) and ICR of “a+” of The Cincinnati Life Insurance Co. (Cincinnati Life). The outlook for all ratings is stable.
All companies are domiciled in Fairfield, Ohio, except where specified.
CIC’s ratings reflect its superior risk-adjusted capitalization, conservative reserving philosophy that has historically produced redundant reserves, historical operating performance and successful distribution within its targeted regional markets.
A key element of CIC’s business strategy is the group’s focus on marketing and servicing clients through a network of independent agents fostered through strong, long-term relationships.
Successful agency relations are demonstrated when measuring the production of CIC’s agencies, as the group is either the number one or number two carrier in more than 75 percent of reporting agency locations appointed for more than five years. CIC’s relationship with its agent base is strengthened by the local presence of field support associates, a competitive commission structure and comprehensive portfolio of insurance products.
The ratings also reflect the financial flexibility provided by CINF, which maintains modest financial leverage and considerable liquid assets totaling nearly $1.1 billion (sum of stocks, bonds and cash on balance sheets) at Sept. 30, 2010.
Partially offsetting these positive rating factors are CIC’s elevated common stock leverage, geographic concentration and underwriting losses that began in 2008 and were driven by soft market conditions on its core commercial lines book of business, as well as its underperforming homeowners’ and workers’ compensation books of business.
Source: A.M. Best
Topics AM Best
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