A.M. Best Upgrades Issuer Credit Ratings of Employers Mutual Casualty Company and Certain Subsidiaries - Seite 2

The ratings of EMC Re reflect its balance sheet strength, which A.M. Best categorizes as strongest, as well as its adequate operating performance, limited business profile and appropriate ERM. The ratings also consider the support the company receives from EMCC. Offsetting rating factors are EMC Re’s significant dependence on EMCC; its exposure to natural catastrophe and weather-related events; and the competitive challenges in the reinsurance market, which have grown more competitive due to excess capacity and the infusion of capital from alternative markets.

The ratings of EMCNL reflects its balance sheet strength, which A.M. Best categorizes as very strong, as well as its marginal operating performance, neutral business profile and appropriate ERM. The ratings of EMCNL also reflect its strategic importance to its parent, EMCC, its diversified product profile of life, annuity and workplace products, strong risk-adjusted capitalization and positive but fluctuating earnings in recent years. Partially offsetting rating factors include a high percentage of interest-sensitive liabilities at minimum guaranteed crediting rates, challenges of building scale in its workplace business and having a significant percentage of annuity liabilities that lack surrender protection.

The ratings of EMCI recognize the capital strength of its P/C subsidiaries, the benefits derived from the intercompany pooling agreement with EMCC and the absence of any financial leverage with no existing debt outstanding.

The Long-Term ICRs have been upgraded to “a+” from “a” and the FSR of A (Excellent) has been affirmed, each with a stable outlook for EMCC and its following P/C subsidiaries. These companies are all part of an intercompany pooling agreement, whereby all premiums, losses and expenses are shared proportionally based on their stated pooling participation:

• Dakota Fire Insurance Company
• EMC Property & Casualty Company
• EMCASCO Insurance Company
• Illinois EMCASCO Insurance Company
• Union Insurance Company of Providence

This press release relates to Credit Ratings that have been published on A.M. Best’s website. For all rating information relating to the release and pertinent disclosures, including details of the office responsible for issuing each of the individual ratings referenced in this release, please see A.M. Best’s Recent Rating Activity web page. For additional information regarding the use and limitations of Credit Rating opinions, please view Understanding Best’s Credit Ratings. For information on the proper media use of Best’s Credit Ratings and A.M. Best press releases, please view Guide for Media - Proper Use of Best’s Credit Ratings and A.M. Best Rating Action Press Releases.