Best Upgrades A.I.M. Mutual Companies to ‘A’; Outlook Stable

May 29, 2007

A.M. Best Co. has upgraded the financial strength ratings (FSR) to “A” (Excellent) from “A-” (Excellent) and revised the outlook to stable from positive for A.I.M. Mutual Insurance Companies and its members. These are Associated Industries of Massachusetts Mutual Insurance Company (A.I.M.) and its wholly owned reinsured subsidiary, Associated Employers Insurance Company (AEIC).

Best also assigned an An FSR of “A” (Excellent) with a stable outlook to A.I.M.’s other reinsured subsidiary, Massachusetts Employers Insurance Company (MEIC). Concurrently, Best assigned issuer credit ratings (ICR) of “a” to A.I.M. Mutual Insurance Companies and its members. The outlook for the ICRs is stable. All companies the are domiciled in Burlington, Mass.

“The ratings reflect the group’s excellent capitalization, strong operating performance, conservative reserving practices and the inherent benefits derived from its sponsor, Associated Industries of Massachusetts, Inc,” said Best.

However the rating agency cited the “concentration risk as a regional workers’ compensation writer, which potentially exposes the group to adverse developments and changes within the economic, legislative and regulatory environment,” as an offsetting factor. Nonetheless, Best described its outlook on the group as based on its “solid capitalization, improved profitability and commitment to maintaining reserve adequacy.”

The positive rating factors “are driven by the group’s strict underwriting guidelines and the competitive advantages of sponsorship by the largest employer advocate association in Massachusetts,” Best continued.

Significantly the rating agency noted that “employer involvement, loss control and claims administration practices have played a role in the group’s success over the years. A.I.M. ranks among the top writers of workers’ compensation coverage in Massachusetts. Accordingly, the group’s niche product focus and local market knowledge have contributed to its strong performance.”

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