AM Best Company has affirmed the ratings of Frankenmuth Insurance.  The financial strength rating (FSR) of A (Excellent) has been affirmed with a stable outlook.  The issuer credit rating (ICR) has been affirmed as “a+” (Strong) with a negative outlook.  The affirmation of both ratings reflects our company’s strong capitalization, positive after-tax income, and ability to meet our commitments and obligations to policyholders. 

AM Best’s ratings represent their assessment of Frankenmuth Mutual Insurance Company and its property and casualty insurance subsidiaries:  Ansur America Insurance Company, Patriot Insurance Company, ASure Worldwide Insurance Company, and Fortuity Insurance Company.

The ratings of Patriot Life Insurance Company have also been affirmed with an FSR rating of A (Excellent) and ICR rating of “a” (Strong).  Both have been affirmed with a stable outlook.

The rating decision by AM Best was as expected.  Based on our positive results in 2012, their rating and outlook affirmations on both the FSR and ICR are exactly what we anticipated. 

Of the two ratings, the Financial Strength Rating (FSR) is the most recognized and relied upon rating from AM Best.  It reflects their opinion of an insurance carrier’s ability to pay claims and protect its policyholders. 

The Issuer Credit Rating (ICR) is Best’s opinion of an insurer’s creditworthiness and ability to meet senior financial obligations.  Although Frankenmuth has no senior financial obligations, we are still rated by AM Best, and the outlook was revised in 2012. 

The negative outlook in the ICR is due to underwriting losses over the past five years that trail our commercial casualty peer comparison.  Primarily, increased storm related losses in 2008 and 2011, as well as Personal Auto losses in Michigan’s Personal Injury Protection (PIP) coverage and deteriorating performance in Workers’ Compensation, have impacted overall results.

We are confident our plans for 2013 will yield positive results that will support continued strong FSR and ICR ratings from AM Best.  As a mutual company, our primary focus is providing the highest level of protection and security to policyholders.  Working together with our independent agent partners, we are well prepared to continue providing peace of mind and financial assurance, exceeding all stakeholders’ expectations.

Our commitment to accomplishing our stated objectives would not be possible without the support of our valued, loyal independent agent partners and dedicated employees. 

We wish to thank you all for your contribution to our past success as well as the bright future that lies ahead.