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December 18, 2012 at 15:01 PM EST
A.M. Best Upgrades Issuer Credit Ratings of Members of Vermont Mutual Insurance Group

A.M. Best Co. has upgraded the issuer credit ratings (ICR) to “a+” from “a” and affirmed the financial strength rating of A (Excellent) of Vermont Mutual Insurance Company (Vermont Mutual) and its two fully reinsured subsidiaries, Northern Security Insurance Company, Inc. and Granite Mutual Insurance Company. These companies are members of Vermont Mutual Insurance Group and are all domiciled in Montpelier, VT. The outlook for all ratings is stable.

The upgrade of the ICRs reflects Vermont Mutual’s favorable underwriting and operating results, which have consistently outperformed the industry composite in recent years. In addition, Vermont Mutual continues to maintain solid risk-adjusted capitalization, a well-established market presence in the New England states and knowledge of local insurance issues.

Offsetting these positive rating factors is Vermont Mutual’s business concentration in the New England states, which exposes it to weather-related events and competitive market conditions. However, the company maintains a comprehensive reinsurance coverage program to mitigate potential catastrophe losses.

Key drivers that could lead to future positive rating actions would be Vermont Mutual producing an operating performance in line with its historically strong results while maintaining its strong risk-adjusted capital position. However, if frequent and severe weather events continue to impact the company's geographical location, and/or other market disruptions cause underwriting losses with a substantial negative impact on risk-adjusted.

The methodology used in determining these ratings is Best’s Credit Rating Methodology, which provides a comprehensive explanation of A.M. Best’s rating process and contains the different rating criteria employed in the rating process. Key criteria utilized include: “Risk Management and the Rating Process for Insurance Companies”; “Catastrophe Analysis in A.M. Best Ratings”; “Understanding BCAR for Property/Casualty Insurers”; and “Rating Members of Insurance Groups.” Best’s Credit Rating Methodology can be found at

Founded in 1899, A.M. Best Company is the world's oldest and most authoritative insurance rating and information source. For more information, visit

Copyright © 2012 by A.M. Best Company, Inc. ALL RIGHTS RESERVED.


A.M. Best Co.
Adib Nassery
Financial Analyst
(908) 439-2200, ext. 5687
Greg Williams
Managing Senior Financial Analyst
(908) 439-2200, ext. 5815
Rachelle Morrow
Senior Manager, Public Relations
(908) 439-2200, ext. 5378
Jim Peavy
Assistant Vice President, Public Relations
(908) 439-2200, ext. 5644
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