A.M. Best Revises Outlook to Positive for Lackawanna Insurance Group and Its Members

2008-11-09 05:26:01 -

www.ambest.com - A.M. Best Co. has revised the outlook to positive from stable and affirmed the financial strength rating of A- (Excellent) and issuer credit ratings of "a-"of Lackawanna Insurance Group (LIG) and its members. LIG consists of Lackawanna Casualty Company (LCC) and its wholly owned subsidiaries, Lackawanna American Insurance Company (LAIC) and Lackawanna National Insurance Company (LNIC), which operate under an intercompany pooling agreement. All companies are domiciled in Wilkes-Barre, PA.

These rating actions reflect LIG's excellent capitalization, strong profitability and solid underwriting performance achieved through its selective underwriting appetite and overall pricing flexibility through LAIC and LNIC. LIG has historically maintained strong policyholder retention ratios given its sound relationships with producers and service-oriented approach to writing business.

Offsetting these positive rating factors is the group's limited spread of risk, both geographically and by product line, and high common stock leverage, which exposes the group to fluctuations within the equity markets. Despite these concerns, the outlook reflects LIG's excellent capitalization achieved through the retention of strong earnings and A.M. Best's expectation that it will maintain underwriting discipline throughout market cycles.

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

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:
Gordon McLean, 908-439-2200, ext. 5304
gordon.mclean@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