Cover Story 26 BEST’S REVIEW • JULY 2009 75 50 Fifty-five property/casualty insurers and 14 life/health insurers have maintained a Best’s Financial Strength Rating of A or higher for at least 75 years. S ince 1906, A.M. Best Co. has been issuing finan- cial strength ratings—opinions on the ability of individual insurance companies to pay claims on the coverage they have underwritten. These financial strength ratings evolved over the decades as the insurance industry grew more complex. A select group of insurers has consistently maintained strong financial strength ratings for the past 75 years despite cata- strophic storms and tough economic times.
Transcript
Cover Story
26 Best’s Review • july 2009
7550
Fifty-five property/casualty insurers and 14 life/health insurers have maintained a Best’s Financial Strength Rating of A or higher for at least 75 years.
since 1906, A.M. Best Co. has been issuing finan-cial strength ratings—opinions on the ability of individual insurance companies to pay claims on the coverage they have underwritten.
these financial strength ratings evolved over the decades as the insurance industry grew more complex. A select group of insurers has consistently maintained strong financial strength ratings for the past 75 years despite cata-strophic storms and tough economic times.
Best’s Review • july 2009
Property/Casualty Insurers Rated A or Higher for 75 Years A or Higher Current
Company Name AMB# Since RatingAIG Casualty Co. 02349 1928 AAmerican Automobile Ins. Co. 02176 1933 AAmerican Insurance Co. 02177 1934 AAmerican States Insurance Co. 02287 1930 AAmica Mutual Insurance Co. 02162 1922 A++Baltimore Equitable Society 03225 1933 A+California State Auto Assn. IIB 00228 1927 A+Camden Fire Insurance Assoc. 02193 1934 AContinental Casualty Co. 02128 1922 ACountry Mutual Insurance Co. 02249 1931 A+Euler Hermes Amer. Credit Ind. 02097 1922 A+Farmers Mutual Ins. Co. of NE 00371 1922 AFederal Insurance Co. 02084 1907 A++Federated Mutual Ins. Co. 00384 1934 A+Fidelity and Deposit Co. of MD 00387 1922 AFireman’s Fund Insurance Co. 02179 1924 AGeneral Ins. Co. of America 02447 1926 AGeneral Reinsurance Corp. 02198 1928 A++Germantown Mutual Ins. Co. 00414 1923 AGranite State Insurance Co. 02360 1925 AGreat American Insurance Co. 02213 1908 AGreat Northern Insurance Co. 02085 1923 A++Hartford Accident & Indem. Co. 02230 1922 AHartford Casualty Ins. Co. 02229 1930 AHartford Fire Insurance Co. 02231 1907 AHartford Steam Boiler I & I 00465 1922 A+Hartford Underwriters Ins. Co. 02232 1926 AInsurance Co. of the State PA 02035 1934 ALititz Mutual Insurance Co. 00558 1932 A+Merrimack Mutual Fire Ins. Co. 02055 1920 A+Montgomery Mutual Ins. Co. 00662 1925 AMunich Reinsurance America Inc. 00149 1923 A+Mutual Assurance Society of VA 03260 1933 A+National Fire Ins. Hartford 02129 1914 ANational Union Fire Ins. Co. PA 02351 1934 ANationwide Mutual Ins. Co. 02358 1929 A+New Hampshire Insurance Co. 02363 1907 ANew Jersey Manufacturers Ins. 00694 1934 A++OneBeacon Insurance Co. 02196 1934 APacific Indemnity Co. 02385 1928 A++Peerless Insurance Co. 02394 1922 APharmacists Mutual Ins. Co. 00320 1922 APhiladelphia Contrib for Ins. 03112 1922 A+Providence Mutual Fire Ins. 00787 1918 A
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the property/casualty and life insurance companies that have maintained a Best’s financial strength rating of A or higher for at least 75 years are recog-nized here, as are the insurers that have maintained a similar record of financial strength for at least 50 years. Additionally, we recognize nine insurers that exemplify “standing the test of time” in one-page news articles as part of this feature.
Back Through Timeto identify the companies
with the longest record of con-sistent financial strength, Best’s analysts pored over the rating agency’s proprietary data—pri-marily Best’s Key Rating Guides and Best’s Insurance Reports—to accumulate and verify ratings and other pertinent data dating back to 1905.
A.M. Best’s Rating scale has changed over time in an ongoing effort to increasingly distinguish the relative financial strength of insurers and adapt to changes in the insurance industry. there-fore, in certain circumstances it was necessary to translate or convert various older ratings to conform to the present rat-ing scale. Please note that these translations do not represent any material change or re-evaluation of a company’s rating; they are merely a conversion from one scale to another.
System Launchedthe or ig ina l ra t ing sy s -
tem, implemented in 1906, was devised by the company’s found-er, Alfred M. Best. in 1932, a new rating scale, General Policyhold-ers Ratings, replaced the previ-ously used Desirability Ratings, which applied only to property/casualty insurers.
Desirability Ratings consisted of two components: a loss-paying record, ranked on an alpha scale with “A” being the best; and a rat-ing of management quality, ranked
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Best’s Review • july 2009
Continued from page 27
Quincy Mutual Fire Ins. Co. 00796 1922 A+Selective Ins. Co. of America 00826 1930 A+St. Paul Fire & Marine Ins. Co. 02452 1926 A+State Automobile Mutual Ins. Co. 00855 1925 A+State Farm Mutual Auto Ins. Co. 02479 1929 A++Tri-State Insurance Co. of MN 00918 1927 A+Twin City Fire Insurance Co. 02235 1921 AUnited Services Auto Assn. 00934 1927 A++Western Surety Co. 00974 1935 AWestfield Insurance Co. 02382 1934 AWestport Insurance Corp. 00347 1922 A
Property/Casualty Insurers Rated A or Higher for 75 Years
A or Higher CurrentCompany Name AMB# Since Rating
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Life/Health Insurers Rated A or Higher for 75 Years A or Higher Current
Company Name AMB# Since RatingAviva Life and Annuity Co. 06199 1929 ABeneficial Life Ins. Co. 06162 1929 ACountry Life Ins. Co. 06294 1933 A+Genworth Life and Annuity Ins. 06648 1928 AJohn Hancock Life Insurance 06601 1928 A++Metropolitan Life Ins. Co. 06704 1928 A+Nationwide Life Ins Co. of Amer. 06971 1928 ANew York Life Ins. Co. 06820 1928 A++Northwestern Mutual Life Ins. 06845 1928 A++Penn Mutual Life Ins. Co. 06903 1928 A+Principal Life Insurance Co. 06150 1928 A+Prudential Ins. Co. of America 06974 1928 A+Standard Insurance Co. 07069 1928 AWestern and Southern Life Ins. 07243 1928 A++
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Source: A.M. Best Data. Ratings as of May 18, 2009
Source: A.M. Best Data. Ratings as of May 18, 2009
on a numeric scale with “1” being the best.
Evolvingthe rating scale adopted in
1932 had two components: the Net Resources Rating, the fore-runner of today’s Financial size Category; and the General Poli-cyholders Rating, which evolved into today’s Financial strength Ratings.
From 1935 through 1975, A.M. Best did not assign letter rat-ings to life/health companies. instead they had “comments.” in order to complete this rat-ing history project, a translation was devised to convert those “comments” to equivalent letter ratings. For example, from 1935 to 1952, “More than Ample” was found to be equivalent to today’s “A” rating.
Longevity the nine insurers profiled
here of fer, in microcosm, a glimpse into how the economic cycles have affected the insur-ance industry. they exemplify the grass-roots growth of the industry to protect assets. take, for example, the small group of people who gathered in lititz, Pa., on May 1, 1888, to organize a way to safeguard their assets from fire. today lititz Mutual still is owned by its policyholders.
American Automobile insur-ance Co., launched locally in 1912, is now part of a global insurance giant.
established in 1860, Guardian life insurance Co. is one of the nation’s largest mutuals. Country Mutual insurance Co. is the old-est active farm bureau insurance company.
two of the insurers profiled have an uncommon business model. they operate under the perpetual policy model: tax-advantaged homeowners insur-ance policies, established with an initial lump sum paid upfront, that do not expire.
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Cover Story
Best’s Review • july 2009
Property/Casualty Insurers Rated A or Higher for 50 Years A or Higher Current
Company Name AMB# Since RatingAlfa Mutual Insurance Co. 02005 1953 A+American Agricultural Ins. Co. 03133 1953 AAmerican Cas. Co. Reading, PA 02127 1949 AAmerican Family Mutual Ins. Co. 02022 1939 AAmerican Home Assurance Co. 02034 1944 AAmerican Intern Pacific Ins. Co. 02359 1936 AAmerican Security Insurance Co. 02049 1952 AAmerican States Ins. Co. of TX 02290 1956 AAssociated Indemnity Corp. 02178 1939 ABarnstable County Mut Ins. Co. 00203 1949 ABay State Insurance Co. 02053 1956 A+Bear River Mutual Ins. Co. 00209 1955 ACambridge Mutual Fire Ins. Co. 02054 1935 A+Church Mutual Insurance Co. 00259 1951 A+Cincinnati Insurance Co. 00258 1955 A+Commerce and Industry Ins. Co. 04000 1958 AContinental Western Ins Co. 00971 1951 A+Cumberland Mutual Fire Ins. Co. 00306 1956 AEconomy Fire & Casualty Co. 02276 1939 AErie Insurance Exchange 00348 1939 A+Farm Bureau Mutual Ins. Co. 00354 1946 AFarm Bureau Mutual Ins. of ID 00355 1959 A+First National Ins. Co. of Amer. 02446 1940 AGenerali USB 03073 1957 A+Great American Assurance Co. 02004 1951 AGreat American Insurance Co. NY 02210 1949 AIllinois National Insurance Co. 02361 1937 AKentucky Farm Bureau Mutual 00540 1949 A+Madison Mutual Ins. Co. (IL) 00575 1956 AMerchants Bonding Co. (Mutual) 00594 1958 AMidwestern Indemnity Co. 02323 1956 AMountain West Farm Bureau Mut. 00986 1956 A+National Fire & Marine Ins. Co. 02428 1954 A++National Indemnity Co. 02429 1953 A++National Surety Corp. 02182 1937 ANationwide Mutual Fire Ins. Co. 02357 1938 A+Netherlands Insurance Co. 02393 1949 ANew York Central Mutual Fire 00700 1936 A+North Star Mutual Ins. Co. 00714 1953 A+Ohio Farmers Insurance Co. 02381 1935 AOtsego Mutual Fire Ins. Co. 03152 1938 A+Pennsylvania General Ins. Co. 02195 1956 ASafeco Ins. Co of America 02448 1955 AState Auto Prop. & Cas. Ins. Co. 02475 1954 A+
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Best’s Ratings
this Rating History Project is based on Best’s Financial strength
Ratings. A Best’s Financial strength Rating is an indepen-dent opinion, based on a com-prehensive quantitative and qualitative evaluation of a com-pany’s balance sheet strength, operating performance and business profile that assesses a company’s ability to meet its obligations to policyholders.
A.M. Best Company was founded in 1899 with the purpose of performing a con-structive and objective role in the insurance industry toward the prevention and detec-tion of insurer insolvency. this mission led to the devel-opment of Best’s Ratings, which are now recognized worldwide as the benchmark for assessing insurers’ finan-cial strength. Best’s rating opinions ref lect an in-depth understanding of business fundamentals garnered from more than 100 years of focus-ing solely on the insurance industry. this is one reason why insurance industry pro-fessionals have consistently ranked Best’s Ratings No. 1 in confidence, usefulness and understanding.
A Best’s Rating is an inde-pendent third-party evalua-tion that subjects all insurers to the same rigorous criteria, providing a valuable bench-mark for comparing insurers, regardless of their country of domicile. such a benchmark is increasingly important to an international market that looks for a strong indica-tion of stability in the face of widespread deregulation, mergers, acquisitions and other dynamic factors.
29
Cover Story
Best’s Review • july 2009
Continued from page 29
Property/Casualty Insurers Rated A or Higher for 50 Years
Life/Health Insurers Rated A or Higher for 50 Years A or Higher Current
Company Name AMB# Since RatingAmerican General Lf. & Accident 06788 1948 AAmerican National Ins. Co. 06087 1941 A+American United Life Ins. Co. 06109 1950 ACanada Life Assurance Co. 06183 1939 A+Columbus Life Insurance Co. 06244 1938 A++Great-West Life Assurance Co. 06493 1945 A+Guardian Life Ins. Co. of Amer. 06508 1947 A++Hartford Life Ins. Co. 06518 1940 AKansas City Life Ins. Co. 06605 1952 ALiberty Life Insurance Co. 06175 1954 ALiberty National Life Ins. Co. 06629 1958 A+Lincoln National Life Ins. Co. 06664 1940 A+Manufacturers Life Ins. Co. 06688 1939 A++Massachusetts Mutual Life Ins. 06695 1939 A++Minnesota Life Ins. Co. 06724 1940 A+Nationwide Life Ins. Co. 06812 1954 A+Pacific Life Insurance Co. 06885 1959 A+Protective Life Ins. Co. 06962 1940 A+ReliaStar Life Insurance Co. 06846 1945 AState Farm Life Ins. Co. 07080 1954 A++Sun Life Assur. Co. of Canada 07101 1946 A+United of Omaha Life Ins. Co. 07164 1956 A+United States Life Ins. of NY 07192 1959 A
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Source: A.M. Best Data. Ratings as of May 18, 2009
Source: A.M. Best Data. Ratings as of May 18, 2009
Anniversary BestMark
AM. Best Co. has launched a program to recognize insurance companies
that have maintained a financial strength rating of A or higher for at least 25 years.
the Anniversary BestMark program consists of a special icon—distinct from the stan-dard BestMark—that incor-porates the company’s name and acknowledges the year a company first achieved the financial strength rating of A. Print and internet-compatible versions of the icon will be supplied. eligible companies can use this icon in a man-ner similar to the current BestMark—for example, on their web sites, in print and online advertising, and on the cover of Best’s Rating Report reprints.
eligible companies can request an Anniversary BestMark via e-mail to [email protected] or phone call to A.M. Best, (908) 439-2200, ext. 5373.
YOUR COMPANYNAME HERE
AM BEST
“A” or Higher Since 1976
Financial Strength Rating
Watch a video about this article on bestreview.com/videos
30
Company profiles reported by Editorial Assistant Kate Fry.
32 Best’s Review • july 2009
American Automobile insur-ance Co., a Fireman’s Fund insurance Co. subsidiary,
launched on jan. 1, 1912. American Auto is one of a nine-member inter-company pool with five reinsured subsidiaries.
Fireman’s Fund is a national, mul-t i l ine property/casu-alty insurer, conducting underwr i t ing opera -tions through four busi-ness units, including commercial and specialty. Fireman’s Fund is owned by Allianz Group of Munich, Germany, a leading global provider of insurance, asset man-agement and banking.
Over the years, Fireman’s Fund has demonstrated endurance in the face of catastrophe. Following the Great Chicago Fire in 1871, many insurers went bankrupt while Fireman’s Fund paid all claims even though the company’s losses
exceeded its assets. Agents and adjusters with Fireman’s Fund were among the first civilians to enter the areas devastated by hurricanes Katrina, Rita and wilma to provide their policyholders with funds to get back on their feet.
the company was bold in pro-viding coverage for the new “horseless carriag-es,” and issued the first airplane insurance pol-icy. to help businesses
“go green,” the company offers new vehicle replacement cost coverage with the option to upgrade to a hybrid model. this option helps to reduce energy costs.
Fireman’s Fund maintains a strong west Coast presence, with roughly one quarter of the group’s direct business generated in Califor-nia. Fireman’s Fund personal lines business also produces one quarter of gross premium volume.
American Automobile Insurance Co. has been rated A or higher by A.M. Best since 1933.
Less Than 60 60-90 More Than 90
WA
ORID
MT
CA
NV
AZ
ND
SD
WY
NE
TX
AL
TN
GA
NC
SC
FL
IA
IL
MI
OH
VA
DEMD
NJPA
NY
MEVT
NH MA
CTRI
HI
WVUT
NM
LA
AR
MS
MO
OK
KY
WI
IN
AK
KSCO
MN
Profit CentersThe five states where Fireman’s Fund generates the most premium.
Federal is the third-largest commercial writer in California and New York.
Principal Lines of Business
All Other
InlandMarine
Homeowners
OtherLiability
Comm. M.P.
Allied Lines
0
200
400
600
800
1,000
20082007200620052004
Net Income($ Millions)
Combined Ratio
80
90
100
110
20082007200620052004
Note: After Policyholder Dividends
Horseless Carriage to HybridsVital StatisticsAmerican Automobile Insurance Co.(AMB # 02176)Group Membership: Fireman’s Fund Insurance Companies (AMB # 34)Chief Executive: Michael LaRoccoHeadquarters: Novato, Calif.Assets:1933: $8.561 Million2008: $13.09 Billion**Note: 2008 assets include parent company
Michael LaRocco
0
3
6
9
12
15
20082007200620052004
Total Assets($ Billions)
Group Results
Source: BestLink
American states insurance Co. was incorporated in indiana on july 15, 1929, and began busi-
ness the same day. the company's pres-ent name was adopted in 1930. in Octo-ber 1997, American states was acquired by safeco Corp., which itself was acquired by liberty Mutual insurance Cos. in september 2008.
liberty Mutual has a diversified franchise and maintains an excellent reputation in service and strong client relationships. it offers extensive unbundled service capabilities, risk management services and strategic alliances with managed care networks, which gives liberty Mutual a significant competitive advan-tage and a superior market profile.
the Massachusetts employees’ insurance Association began opera-tions in 1912. MeiA later changed its name to liberty Mutual in 1917. As a mutual company, MeiA was owned by policyholders, not stockhold-ers. As such, the mutual company worked on behalf of its policyhold-
ers, a tradition that continues today. liberty Mutual is engaged in under-
writing all lines of commercial and personal business. the group is the nation’s third-largest commercial lines writer and the seventh-largest personal
lines writer based on direct premiums writ-ten. Personal lines busi-ness ranks high among the group’s top perform-ing underwriting seg-
ments. the group is focusing on new markets in countries with an emerg-ing middle class. the business is split approximately 60% commercial and 40% personal lines. the group ranks as the fifth-largest property/casualty orga-nization in the united states, based on direct premiums written. in addition to personal and commercial markets, the group operates in agency and inter-national markets. in early 2009 liberty Mutual said it would sell its middle-mar-ket direct distribution business and its wausau agency brand to focus on sell-ing to this market only through inde-pendent agents and brokers.
American States Insurance Co. has been rated A or higher by A.M. Best since 1930.
Less Than 60 60-90 More Than 90
WA
ORID
MT
CA
NV
AZ
ND
SD
WY
NE
TX
AL
TN
GA
NC
SC
FL
IA
IL
MI
OH
VA
DEMD
NJPA
NY
MEVT
NH MA
CTRI
HI
WVUT
NM
LA
AR
MS
MO
OK
KY
WI
IN
AK
KSCO
MN
Profit CentersThe five states where Liberty Mutual generates the most premium.
Federal is the third-largest commercial writer in California and New York.
Principal Lines of Business
AllOther
Comm.M.P.
Auto Phys.Damage Homeowners
PP AutoLiability
Workers’Comp
0.0
0.5
1.0
1.5
2.0
20082007200620052004
Net Income($ Billions)
Combined Ratio
959799
101103105
20082007200620052004
Note: After Policyholder Dividends
Vital StatisticsAmerican States Insurance Co. (AMB # 2287)Group Membership: Liberty Mutual Insurance Companies (AMB # 60)President: Edmund F. KellyHeadquarters: Indianapolis, Ind.Assets:1930: $638,000 2008: $2.07 Billion
Edmund F. Kelly
0
20
40
60
80
20082007200620052004
Total Assets($ Billions)
Group Results
Cover Story
33Best’s Review • july 2009
Engine for Expansion
Source: BestLink
34 Best’s Review • july 2009
t he Baltimore equitable soci-ety, one of the city’s oldest corporations, has maintained
a long-standing marketing presence in Maryland.
the society was founded in 1794. throughout its history, the company has maintained a strong tradition of prompt and full payment to its poli-cyholders. On Dec. 4, 1796, the society sus-tained its first loss when a fire consumed two brick houses at light and Baltimore streets. the blaze also destroyed a number of other businesses, homes and a church.
At the turn of the century, the city of Baltimore experienced another trag-edy. On Feb. 7, 1904, a wholesale dry goods house caught fire in the heart of the city’s business district. the Great Baltimore Fire destroyed 150 acres and 2,500 businesses and total damages reached $150 million. the fire affected 455 policyholders and despite the company’s significant losses, the soci-ety ensured that all policyholders were
promptly paid in full.the society’s expertise as a specialty
writer of perpetual fire and homeown-ers policies, as well as its knowledge of the Baltimore market, has played a crucial role in its success. Baltimore equitable is one of several insurance companies in the united states that operates under the perpetual policy
deposit method. As a writer of perpetual insurance policies, Bal-timore equitable col-lects an initial deposit
for each policy in lieu of premium. the company’s large investment port-folio generates income, as well as real-ized capital gains, to pay claims and cover operating expenses. the com-pany writes only homeowners and broad-form fire policies in Maryland and Pennsylvania on a direct basis. the society’s strong franchise and unique product have contributed to favorable growth and business persistence in its current markets. these factors have also provided an opportunity to diver-sify its product into Pennsylvania.
The Baltimore Equitable Society has been rated A or higher by A.M. Best since 1933.
0
17
34
51
68
85
20082007200620052004
Policyholders’ Surplus($ Millions)
-3-2-1012345
20082007200620052004
Net Income($ Millions)
Yield on Invested Assets
012345
20082007200620052004
Homeownership Is the Policy
Annual Statement 2008
Baltimore Equitable Insurance
Vital StatisticsBaltimore Equitable Society(AMB # 3225)President: Timothy J. SwartzHeadquarters: Baltimore, Md.Assets: 1933: $2.114 Million 2008: $108.594 Million
0
30
60
90
120
150
20082007200620052004
Total Assets($ Millions)
Company Results
Cover Story
Timothy J. Swartz
($ Millions)
0
500
1000
1500
2,000
2,500
3,000
3,500
Group Accident & HealthGroup LifeOrdinary Life
20082007200620052004
Invested Assets
0
10
20
30
40
50
Cash, CashEquivalents &Short-TermInvestments
CommonStocks
Bonds(Schedule D)
(%)
0
500
1000
1500
2,000
2,500
3,000
3,500
Group Accident & HealthGroup LifeOrdinary Life
20082007200620052004
Bond Portfolio Composition
0
20
40
60
80
100
CorporateState, Terr & PossGovernment
Class 1-2(%)*% of Total
*Percentage of bonds invested in the two highest quality categories Source: BestLink
Best’s Review • july 2009
s ince 1925, Country Mutual insurance Co. has specialized in farm insurance and built
upon its strong agricultural roots to become one of the leading insurers of farms and ranches in Alaska, illi-nois, Nevada, Oregon and washing-ton. A subsidiary of Country Financial, which con-sists of nine compa-nies, Country Mutual leads the group as the oldest active farm bureau insurance company in the united states.
Country Financial began as a fire and lightning insurance company in 1925. A year later, the company began to offer crop, hail and farm equip-ment insurance, and over time offered auto and life insurance as well.
today it is primarily focused on private-passenger auto and home- owner lines, and farm and small “main street” commercial insurance products, including agricultural cov-erage in Farm Bureau-sponsored
states. Recently, Country Financial has been expanding its portfolio of multiline personal policies. Geo-graphic and product expansions have resulted from the affiliations and acquisitions, and management has a proven track record of produc-
ing profitable results in years subsequent to the
mergers. Country Financial is predom-
inantly a personal lines writer, generating
approximately half of its total direct premium revenue in illi-nois, with the balance written in 35 additional states.
Country Financial benefits from an effective distribution network, cus-tomer loyalty, broad technology plat-form and local market knowledge. in addition, the group focuses on cross-selling of products to further strengthen its high business reten-tion ratio. such attributes have made it one of the 40 largest u.s. property/casualty groups.
Country Mutual Insurance Co. has been rated A or higher by A.M. Best since 1931.
Less Than 60 60-90 More Than 90
WA
ORID
MT
CA
NV
AZ
ND
SD
WY
NE
TX
AL
TNNC
SC
FL
IA
IL
MI
OH
VA
DEMD
NJPA
NY
MEVT
NH MA
CTRI
HI
WVUT
NM
LA
AR
MS
MO
OK
KY
WI
IN
AK
KSCO
MN
Profit Centers The five states where Country Financial generates the most premium.
Federal is the third-largest commercial writer in California and New York.
the Guardian life insurance Company of America, a subsid-iary of Guardian life Group,
is one of the largest u.s. mutual life insurance companies. it was founded by Hugo wesendonck in 1860 in New york and called the Germania life insurance Company of New york.
By 1868, Germania was the first u.s. insurance com-pany to establish an agency in europe. Almost half of Ger-mania’s business was outside North America by the early 1900s, until the pressures of world war i forced the company to stop writing busi-ness in europe. in 1917, the com-pany changed its name to Guardian life insurance Company of America. today the company is licensed in all states and the District of Columbia.
Guardian life provides a full range of insurance, investment, securities brokerage and other related prod-ucts and services through a number of affiliates. its strategy for growth
focuses on expanding and improv-ing its career agency system while growing supplementary independent agent and broker channels to distrib-ute its individual insurance products.
A.M. Best upgraded Guardian’s financial strength ratings to A++
from A+ in late 2008. the ratings reflect Guardian’s superior capi-
talization, maintenance of positive earnings trends and the organization’s suc-cessful execution of sev-
eral key strategic initiatives over the past several years. the upgrade also considers the group’s well-diversified product portfolio, underpinned by strong positions in its core life, annu-ity, individual disability, dental and employee benefits markets.
in 2006, Guardian life introduced “the living Balance sheet,” a web-based tool that allows customers to consolidate their financial informa-tion. this improves the agent’s abil-ity to provide financial solutions to customers.
Guardian Life Insurance Company of America has been rated A or higher by A.M. Best Co. since 1947.
0.00.51.01.52.02.53.03.54.0
20082007200620052004
Total Capital & Surplus($ Billions)
Net Operating Gain To Total Revenue(%)
2
3
4
5
20082007200620052004
Total Return(%)
0
2
4
6
8
20082007200620052004
Our financial strength provides PEACE OF MIND
ANNUAL REPORT 2008
Vital StatisticsGuardian Life Insurance Company of America(AMB # 6508)Group Membership: Guardian Life Group (AMB # 20389)Chief Executive: Dennis J. ManningHeadquarters: New York, N.Y.Assets:1947: $226,000 2008: $28.97 Billion
Dennis J. Manning
05
1015202530
20082007200620052004
Total Assets($ Billions)
Company Results
All the Right Moves
37Best’s Review • july 2009
Primary Lines of Business (Company)($ Billions)
0
500
1000
1500
2,000
2,500
3,000
3,500
Group Accident & HealthGroup LifeOrdinary Life
20082007200620052004Source: BestLink
Cover Story
Best’s Review • july 2009
On May 1, 1888, 25 citizens from lancaster County in Pennsylvania gathered in
lititz to organize the Agricultural Mutual Fire Company of lancaster County. Dedicated to their Penn-sylvania Dutch heritage, these citizens adopted by-laws on the principles of thrift, integrity and full measure for value received.
the lititz Mutual insur-ance Co., as it is known today, is a subsidiary of lititz Mutual insurance Group. the group is led by lititz Mutual insurance Co., and includes its three reinsured affiliates.
the operations of the companies are conducted in nine states located
primarily along the east Coast of the united states.
the company’s largest state of operation is Pennsylvania with 38% of total direct writings. its under-writing operations are centered pri-
marily on homeowners coverage, which compris-es approximately 72% of net premium volume. in terms of policyhold-
ers’ surplus, the company is among the largest mutual insurers in America.
lititz Mutual is proud of its agricultural background. with a solid foundation of the principles adopted by its founders, the company has built one of the lead-
ing mutual insurance companies in Pennsylvania.
Lititz Mutual has been rated A or higher by A.M. Best since 1932.
Less Than 60 60-90 More Than 90
WA
ORID
MT
CA
NV
AZ
ND
SD
WY
NE
TX
AL
TNNC
SC
FL
IA
IL
MI
OH
VA
DEMD
NJPA
NY
MEVT
NH MA
CTRI
HI
WVUT
NM
LA
AR
MS
MO
OK
KY
WI
IN
AK
KSCO
MN
Profit CentersThe five states where Lititz Mutual generates the most premium.
Federal is the third-largest commercial writer in California and New York.
GA
LA
Principal Lines of BusinessAll
OtherAllied Lines
Farmowners
Fire
Comm M.P.Homeowners
-202468
101214
20082007200620052004
Net Income($ Millions)
Combined Ratio
80
100
120
20082007200620052004
Note: After Policyholder Dividends
Vital StatisticsLititz Mutual Insurance Co. (AMB # 558)Group Membership: Lititz Mutual Insurance Group (AMB # 18518)Chief Executive: Henry H. GibbelPresident and COO:Henry R. GibbelHeadquarters: Lititz, Pa.Assets: 1932: $270,000 2008: $185.5 Million
Henry H. Gibbel
050
100150200250300
20082007200620052004
Total Assets($ Millions)
Group Results
Insurer Grew From Grass Roots
Henry R. Gibbel
38
Source: BestLink
Best’s Review • july 2009
F or the Mutual Assurance society of virginia, the fun-damental principle of “mutual
assurance and mutual risk” that originated in the society’s char-ter remains true today. As the old-est fire insurance company and the oldest continuously operated corporation in virginia, Mutual Assurance was founded on Dec. 22, 1794, by an act of incorpo-ration from the virginia leg-islature. the company began operations as a fire underwriter in Richmond and the surrounding area in 1795 under the name the Mutual Assurance society, Against Fire on Buildings, of the state of virginia.
since inception, the company has written single-premium assessable perpetual term policies. the com-pany confined its operations to fire insurance until May 17, 1955, when the charter was modified to include
the writing of miscellaneous prop-erty and water damage coverage. the company amended its charter again in june of 1965 to further expand its permitted activities to include the writing of multiple-line
coverage when issued as a sup-plemental or comprehensive contract in connection with a fire insurance policy.
the company maintains a long-standing market pres-
ence in Richmond and its sur-rounding areas as a specialty
writer of perpetual-type fire and homeowners insurance. A variety of personal lines coverages are written throughout the state on a single premium with a continuous policy. underwriting emphasis is placed on homeowners policies for preferred risks.
strong branding has enabled Mutual Assurance to achieve favor-able growth and business persis-tence in established markets.
Mutual Assurance Society of Virginia has been rated A or higher by A.M. Best since 1933.
Principal Lines of BusinessOther Liability
Allied LinesOther LiabilityFire
Rein-NPALiability
Homeowners
-8
-4
0
4
8
12
20082007200620052004
Net Income($ Millions)
Combined Ratio
100200300400500600700800
20082007200620052004
Note: After Policyholder Dividends
Finding a Strong NicheVital StatisticsMutual Assurance Society of Virginia (AMB # 3260)Chief Executive: L. Gerald RoachHeadquarters: Richmond, Va.Assets:1933: $4.06 Million2008: $171 Million
L. Gerald Roach
0
50
100
150
200
250
20082007200620052004
Total Assets($ Millions)
Company Results
($ Millions)
0
500
1000
1500
2,000
2,500
3,000
3,500
Group Accident & HealthGroup LifeOrdinary Life
20082007200620052004
Policyholders’ Surplus
0
50
100
150
200
250
20082007200620052004
(%)
0
500
1000
1500
2,000
2,500
3,000
3,500
Group Accident & HealthGroup LifeOrdinary Life
20082007200620052004
Yield on Invested Assets
2.9
3.0
3.1
3.2
3.3
3.4
3.5
20082007200620052004
Source: BestLink
40
As the leading member of selec-tive insurance Group, selec-tive insurance Company of
America contributes to the group’s strong reputation and ranking among the top 50 property/casualty organi-zations in the united states, based on net premiums written.
in the 1920s, Daniel l.B. smith, the founder of selective, operated a small chain of general stores in sussex County, N.j. He lent a horse and carriage to one of his friends, a banker and insurance agent. the horse ran away and wrecked the carriage but smith refused to take any payment. when the friend moved away, he gave smith some policy declarations for farms and homes he had insured through his agency, which then became the D.l.B. smith Agency. Over time, smith became well-known as a man who cared about his clients and kept his word. His commitment to providing the best service and products has
been the foundation of selective’s strategy.
As a regional multiline property/casualty organization, selective has ded-icated service capabilities, and offers a broad range of insurance products and services. selective’s successful field-based operating model and its technol-ogy infrastructure gives the group the ability to leverage its strong agency relationships. it has sustained strong
market penetration and maintained high policyholder-retention rates.
selective primarily writes two types of business. Commercial lines repre-sent approximately 87% of net premi-ums written, while personal lines rep-resent approximately 13%. the group sells its property/casualty products and services in 22 states, with New jer-sey accounting for nearly 30% of the group’s net premiums at year-end 2008. Pennsylvania, New york, Maryland and virginia together represent more than 65% of the group’s writings.
Selective Insurance Company of America has been rated A or higher by A.M. Best since 1930.
Less Than 60 60-90 More Than 90
WA
ORID
MT
CA
NV
AZ
ND
SD
WY
NE
TX
AL
TNNC
SC
FL
IA
IL
MI
OH DEMD
NJPA
NY
MEVT
NH MA
CTRI
HI
WVUT
NM
LA
AR
MS
MO
OK
KY
WI
IN
AK
KSCO
MN
Profit CentersThe five states where Selective Insurance Group generates the most premium.
Federal is the third-largest commercial writer in California and New York.
GA
VA
Principal Lines of Business
AllOther
AutoPhys.
Damage
PP AutoLiability
Comm.Auto
Liability
Workers’Comp
OtherLiability
0
50
100
150
200
20082007200620052004
Net Income($ Millions)
Combined Ratio
92
94
96
98
100
20082007200620052004
Note: After Policyholder Dividends
SELECTIVE®
Vital StatisticsSelective Insurance Company of America (AMB # 826)Group Membership: Selective Insurance Group (AMB # 3926)Chief Executive: Gregory E. MurphyHeadquarters: Branchville, N.J.Assets: 1930: $307,000 2008: $2.24 Billion
Gregory E. Murphy
0
1
2
3
4
5
20082007200620052004
Total Assets($ Billions)
Group Results
Cover Story
41Best’s Review • july 2009
Regional Specialists
Source: BestLink
42 Best’s Review • july 2009
As a leading multiline prop-erty/casualty company of westfield Group, westfield
insurance Co. plays a major role in the group’s ranking among the 10 largest writers in Ohio. the group writes business in the Midwest and south Atlantic regions of the united states, offering a broad range of insurance and related products to individuals and businesses.
As one of the top writ-ers of farm business in the united states, it comes as no surprise that westfield was founded by a small group of Ohio farmers who joined together to form the Ohio Farmers insurance Co. in order to protect their property.
in the late 1800s, the company was in search of a logo and finally chose an image, provided by a local printer, of a farmer sitting on a fence. the image, which became
known as “the Old Man on the Fence,” epitomized the company’s philosophy: honest, independent and hard-working.
westfield is a provider of com-mercial and personal insurance in
18 states, with the breakdown of the business approximately 35% personal lines and 65%
commercial lines. in addi-tion, westfield provides surety services to cus-tomers. the group is the largest writer of contract
performance bonds in Ohio. the group has s ignif icantly
expanded its market outside of Ohio and into nearby Midwestern states. in 2000, westfield acquired the Old Guard group of insurance companies, located in lancaster, Pa., to diversify geographic risk. the group holds $3.6 billion in consoli-dated assets and $1.7 billion in writ-ten premium.
Westfield Insurance Co. has been rated A or higher by A.M. Best since 1934.
Less Than 60 60-90 More Than 90
WA
ORID
MT
CA
NV
AZ
ND
SD
WY
NE
TX
AL
TNNC
SC
FL
IA
IL
MI
OH
VA
DEMD
NJPA
NY
MEVT
NH MA
CTRI
HI
WVUT
NM
LA
AR
MS
MO
OK
KY
WI
IN
AK
KSCO
MN
Profit CentersThe five states where Westfield Group generates the most premium.
Federal is the third-largest commercial writer in California and New York.
GA
Principal Lines of Business
AllOther
Homeowners
AlliedLines Auto
Phys.Damage
PP AutoLiability
Comm.M.P.
-200
20406080
100
20082007200620052004
Net Income($ Millions)
Combined Ratio
889092949698
100102
20082007200620052004
Note: After Policyholder Dividends
Survival TacticsVital StatisticsWestfield Insurance Co. (AMB # 2382)Group Membership: Westfield Group (AMB # 730)Chief Executive: Robert J. JoyceHeadquarters: Westfield Center, OhioAssets: 1934: $819,000 2008: $2.12 Billion
