Erie Insurance employees celebrate a century of steady growth
Erie Insurance serves customers in 12 states and the District of Columbia and employs more than 6,500 people in Erie and field offices.
Teachers aren’t the only ones who assign letter grades.
In the insurance industry, AM Best, a global credit rating agency, rates the credit worthiness of 16,000 insurance in more than 100 countries around the world.
For years, the financial strength of Erie Insurance consistently earned an A+ or a Superior rating.
In a move announced earlier in September, the global ratings agency downgraded the company’s financial strength rating to A or Excellent.
What’s behind the change?
According to AM Best, founded in 1899, “the rating downgrades reflect the deterioration in Erie’s overall balance sheet strength, driven by multi-year surplus declines over the recent five-year period.”
The source of that downgrade should come as no surprise to anyone who has filed a weather-related insurance claim or has been surprised at the cost of fixing a deer-damaged fender.
According to AM best, “The group’s surplus position has been significantly impacted by large underwriting losses, driven by elevated weather-related events and increased severity in both the auto and homeowners’ segments.”
The company doesn’t disagree with the factors that led to the change in rating.
“While no company welcomes a downgrade, this adjustment to ‘Excellent’ was not unexpected,” Cummings said. “Like many of our competitors, we’ve seen more frequent severe weather events and significantly higher costs in auto and homeowners claims over the last few years. These challenges have impacted our financial results, but they’ve not changed what matters most: our ability to stand by our customers when they need us.”
In its Sept. 5 announcement, AM Best pointed to some favorable factors that shaped its ratings for Erie Insurance.
According to the company, “The ratings of Erie (Insurance) reflect its balance sheet strength, which AM Best assesses as strongest, as well as its adequate operating performance, favorable business profile and appropriate enterprise risk management.”
For his part, Cummings said, “We appreciate AM Best’s thoughtful analysis and continued confidence. We remain focused on delivering the protection and peace of mind that our customers have trusted for more than 100 years.”
Erie Insurance, a Fortune 500 company, is Erie County’s largest employer and is among the region’s largest drivers of both philanthropy and economic development.
Contact Jim Martin at [email protected].