OLDWICK, N.J.--(BUSINESS WIRE)-- A.M. Best Co. has affirmed the financial strength rating of A- (Excellent) and issuer credit ratings (ICR) of “a-” of First Mercury Group (First Mercury) (Chicago, IL) and its members. The group consists of First Mercury Insurance Company (FMIC), First Mercury Casualty Company (FMCC) (both of Southfield, MI) and American Underwriters Insurance Company (AUIC) (Conway, AR). Concurrently, A.M. Best assigned an ICR of “bbb-” to First Mercury’s parent holding company, First Mercury Financial Corporation (FMFC) (NYSE:FMR). The outlook for all ratings is stable.

These rating actions reflect First Mercury’s solid capitalization and consistently strong underwriting and operating performance over the current five-year period. The ratings also recognize First Mercury’s specialty niche business strategy and the complementary benefits derived from its affiliated general agent, CoverX Corporation, which serves as the group’s wholesaler general agent. First Mercury’s overall capitalization was enhanced in 2006 following the initial public offering (IPO) of FMFC. FMFC relies on its non-insurance subsidiaries to meet its modest debt obligations and other holding company requirements.


Somewhat offsetting these positive rating factors is First Mercury’s historically high but improving underwriting expense ratio, continued adverse loss reserve development on certain accident years and the inherent risks associated with the significant growth in premium production.

For Best’s Ratings, an overview of the rating process and rating methodologies, please visit www.ambest.com/ratings.

The principal methodologies used in determining these ratings, including any additional methodologies and factors that may have been considered, can be found at www.ambest.com/ratings/methodology.

Founded in 1899, A.M. Best Company is a global full-service credit rating organization dedicated to serving the financial and health care service industries, including insurance companies, banks, hospitals and health care system providers. For more information, visit www.ambest.com.

A.M. Best Co.

Analysts

Brian O’Larte, 908-439-2200, ext. 5138

brian.olarte@ambest.com

or

Michelle Baurkot, 908-439-2200, ext. 5507

michelle.baurkot@ambest.com

or

Public Relations

Jim Peavy, 908-439-2200, ext. 5644

james.peavy@ambest.com

or

Rachelle Morrow, 908-439-2200, ext. 5378

rachelle.morrow@ambest.com

Source: A.M. Best Co.