AM Best Downgrades Credit Ratings of Members of Auto-Owners Insurance Group; Upgrades Issuer Credit Ratings of Members of Capital Insurance Group; Affirms Credit Ratings of Atlantic Casualty Insurance Company and Certain Affiliates and Subsidiaries

AM Best has downgraded the Financial Strength Rating (FSR) to A+ (Superior) from A++ (Superior) and the Long-Term Issuer Credit Ratings (Long-Term ICR) to “aa” (Superior) from “aa+” (Superior) of Auto-Owners Insurance Company (Auto-Owners) (Lansing, MI) and its four wholly owned property/casualty (P/C) companies that comprise Auto-Owners Insurance Group (AOIG). The outlook of these Credit Ratings (ratings) has been revised to stable from negative. (See below for a detailed list of the companies.)

At the same time, AM Best has upgraded the Long-Term ICRs to “a+” (Excellent) from “a” (Excellent) and affirmed the FSR of A (Excellent) of California Capital Insurance Company (Monterey, CA) and its subsidiaries, which operate under an intercompany pooling arrangement and are collectively referred to as Capital Insurance Group (Capital). The outlook of the Long-Term ICRs has been revised to stable from positive while the outlook of the FSR is stable. (See below for a detailed list of the companies.)

Concurrently, AM Best has affirmed the FSR of A+ (Superior) and the Long-Term ICR of “aa-” (Superior) of Auto-Owners Life Insurance Company (AOLIC) (Lansing, MI), which is a wholly owned subsidiary of Auto-Owners. AM Best also has affirmed the FSR of A+ (Superior) and the Long-Term ICR of “aa-” (Superior) of Atlantic Casualty Insurance Company (Atlantic Casualty) (Goldsboro, NC). In addition, AM Best has affirmed the FSR of A+ (Superior) and the Long-Term ICRs of “aa-” (Superior) of the members of Concord Group Insurance Companies (Concord Group), which is led by Concord General Mutual Insurance Company (Concord General) (Concord, NH). The outlook of these ratings is stable. (See below for a detailed listing of the companies.)

Lastly, AM Best has withdrawn the FSR of A- (Excellent) and the Long-Term ICR of “a-” (Excellent) of Auto-Owners Specialty Insurance Company (AOSIC) (Dover, DE). At the time of the withdrawal, the outlook of these ratings was stable. AM Best’s procedure is for a final rating opinion to be produced in conjunction with a rating withdrawal. However, a final rating opinion could not be produced for AOSIC due to the lack of sufficient forward-looking financial information needed to complete the rating.

The ratings of AOIG reflect its balance sheet strength, which AM Best assesses at the strongest level, as well as its strong operating performance, favorable business profile and appropriate enterprise risk management (ERM). The group’s cumulative weakened underwriting performance since 2022 has largely reflected significant challenges faced by private passenger automobile insurers as a result of significant claims cost inflation affecting both property and liability claims, which strained the group’s very strong operating performance assessment, leading to the downgrades. Despite this, the group has been diligently pursuing rate filings and improving underwriting discipline to improve results. The group has demonstrated a return to profitability in the first half of 2024.

The ratings of Capital reflect its balance sheet strength, which AM Best assesses as very strong, as well as its adequate operating performance, neutral business profile and appropriate ERM. Despite underwriting challenges that have occurred within the past decade, Capital has improved its risk management and underwriting disciplines to produce a sustained trend of profitability. This improved trend led to an upgrade of its operating performance building block assessment to adequate from marginal.

The ratings of Atlantic Casualty reflect its balance sheet strength, which AM Best assesses as strongest, as well as its adequate operating performance, neutral business profile and appropriate ERM. The company displays a favorable level and quality of capital. Despite robust premium growth, it has continually displayed favorable underwriting and operating results.

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

The ratings of Concord Group reflect its balance sheet strength, which AM Best assesses as strongest, as well as its adequate operating performance, neutral business profile and appropriate ERM. Despite winter storm activity in 2023, the group has displayed improved operating performance through the first half of 2024. It continues to expand its book of business with an appropriate focus on geographic and product diversification within its New England footprint.

The FSR has been downgraded to A+ (Superior) from A++ (Superior) and the Long-Term ICRs to “aa” (Superior) from “aa+” (Superior) with the outlooks revised to stable from negative for Auto-Owners Insurance Company and its following wholly owned P/C subsidiaries:

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

The Long-Term ICRs have been upgraded to “a+” (Excellent) from “a” (Excellent) and the FSR of A (Excellent) affirmed, with the Long-Term ICR outlooks revised to stable from positive and the FSR outlook maintained at stable for the following members of Capital Insurance Group:

• California Capital Insurance Company
• Eagle West Insurance Company
• Monterey Insurance Company
• Nevada Capital Insurance Company

The FSR of A+ (Superior) and the Long-Term ICRs of “aa-” (Superior) have been affirmed with stable outlooks for the following members of Concord Group Insurance Companies:

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

This press release relates to Credit Ratings that have been published on AM 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 AM Best’s Recent Rating Activity web page. For additional information regarding the use and limitations of Credit Rating opinions, please view Guide to Best's Credit Ratings. For information on the proper use of Best’s Credit Ratings, Best’s Performance Assessments, Best’s Preliminary Credit Assessments and AM Best press releases, please view Guide to Proper Use of Best’s Ratings & Assessments.

AM Best is a global credit rating agency, news publisher and data analytics provider specializing in the insurance industry. Headquartered in the United States, the company does business in over 100 countries with regional offices in London, Amsterdam, Dubai, Hong Kong, Singapore and Mexico City. For more information, visit www.ambest.com.

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