Steven Wevodau - Accident & Health Insurance News

OLDWICK, N.J.–(BUSINESS WIRE)–A.M. Best Co. has commented that the ratings and positive outlook of Eastern Alliance Insurance Group (EAIG) and its members are unchanged following the recent announcement by EAIG’s holding company, Eastern Insurance Holdings, Inc. (EIHI) [NASDAQ: EIHI] that fourth quarter 2008 results were impacted by reserve development at EAIG’s sister company, Eastern Re Ltd. S.P.C. (Eastern Re) (Grand Cayman, Cayman Islands), EIHI’s run-off specialty reinsurance segment. EAIG consists of Eastern Alliance Insurance Company (EAIC), Allied Eastern Indemnity Company (AEIC), Eastern Advantage Assurance Company (EAAC) and Employers Security Insurance Company (ESIC) (Indianapolis, IN). A.M. Best also has commented that the ratings and stable outlook of Eastern Life and Health Insurance Company (ELH) are unchanged.On April 18, 2008, A.M. Best affirmed the financial strength rating of A- (Excellent) and issuer credit rating (ICR) of “a-” of EAIG and the ICR of “bbb-” of EIHI with a positive outlook on all ratings. Concurrently, A.M. Best affirmed the FSR of A- (Excellent) and ICR of “a-” of ELH with a stable outlook, based on EIHI’s agreement to guarantee the liabilities of ELH, as well as the company’s maintenance of a favorable level of risk-based capital. All companies operate under an intercompany pooling agreement and are domiciled in Lancaster, PA, unless otherwise specified.

The magnitude of the reserve strengthening action requires a reallocation of capital within the organization to replenish capital at Eastern Re. The required capital will be sourced through both EAIG and ELH, each of which maintains sufficient capital relative to their current ratings to source this requirement.

Despite the significant deterioration in EIHI’s 2008 operating results following the required reserve strengthening at Eastern Re during fourth quarter 2008, EAIG and ELH continue to record strong operating results and solid capitalization, while, in particular, EAIG maintains an excellent underwriting performance, which outperforms its peers by a wide margin.

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

The principal methodologies used in determining these ratings, including any additional methodologies and factors, which may have been considered, can be found at www.ambest.com/ratings/methodology.

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