AM Best has revised the outlook to negative from stable for the Long-Term Issuer Credit Rating (Long-Term ICR) and affirmed the Financial Strength Rating (FSR) of A (Excellent) and the Long-Term ICR of “a+” (Excellent) of Erie and Niagara Insurance Association (Erie & Niagara). The outlook of the FSR is stable. Concurrently, AM Best has affirmed the FSR of A- (Excellent) and the Long-Term ICR of “a-” (Excellent) of Cherry Valley Cooperative Insurance Company (Cherry Valley). The outlook of these Credit Ratings (ratings) is stable. Both companies are domiciled in Williamsville, NY.

The ratings reflect Erie & Niagara’s balance sheet strength, which AM Best assesses as strongest, as well as its strong operating performance, neutral business profile and appropriate enterprise risk management (ERM).

The revised outlook to negative from stable of the Long-Term ICR reflects the decline in Erie & Niagara’s operating performance in recent years, which has placed pressure on AM Best’s current assessment of strong. The recent deterioration is driven by elevated weather-related losses (2022 and 2023). While management has taken actions to stabilize results, the ultimate effectiveness in returning performance to historical norms is uncertain. Results through 2024, and the first half of 2025, have shown improvements, but absent a trend of stabilized and sustainable improvements in operating metrics, the ratings are likely to be downgraded.

Erie & Niagara’s balance sheet strength assessment, as measured by Best’s Capital Adequacy Ratio (BCAR), is supported by its strongest level of risk-adjusted capitalization, its low underwriting leverage, conservative investment portfolio, favorable liquidity position and comprehensive reinsurance program. These positive factors are offset partially by the company’s reserve development trends, as well as limited financial flexibility and scale of operation. AM Best’s assessment of Erie and Niagara’s business profile reflects its long-standing regional presence and range of personal property products. The formalized risk management policies and procedures support the ERM assessment of appropriate.

The affirmation of Cherry Valley’s ratings reflects its balance sheet strength, which AM Best assesses as strong, as well as its adequate operating performance, limited business profile and appropriate ERM.

Cherry Valley’s balance sheet strength as measured by BCAR, is supported by its strongest level of risk-adjusted capitalization, very conservative investment risk profile, favorable underwriting and loss reserve leverage measures, strong quick, current and overall liquidity measures, as well as a prudent reinsurance program. Partially offsetting these positive factors are the company's very limited financial flexibility and scale of operations and variable loss reserve development trends over the last 10 years. The company has produced solid operating results, which have outperformed the personal property composite on a five-year average basis. The company’s business profile is limited with its concentrated business model focused on providing umbrella coverage that the product exclusively sold through Erie & Niagara. The stable outlooks reflect AM Best’s expectation that Cherry Valley will maintain its strong balance sheet strength supported by risk-adjusted capitalization at the strongest level, as measured by BCAR, through continued favorable operating results. AM Best expects there will not be changes in support received from Erie & Niagara in terms of sharing all infrastructure, management and employees.

This press release relates to Credit Ratings that have been published on AM 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 AM Best’s Recent Rating Activity web page. For additional information regarding the use and limitations of Credit Rating opinions, please view Guide to Best's Credit Ratings. For information on the proper use of Best’s Credit Ratings, Best’s Performance Assessments, Best’s Preliminary Credit Assessments and AM Best press releases, please view Guide to Proper Use of Best’s Ratings & Assessments.

AM Best is a global credit rating agency, news publisher and data analytics provider specializing in the insurance industry. Headquartered in the United States, the company does business in over 100 countries with regional offices in London, Amsterdam, Dubai, Hong Kong, Singapore and Mexico City. For more information, visit www.ambest.com.

Copyright © 2025 by A.M. Best Rating Services, Inc. and/or its affiliates. ALL RIGHTS RESERVED.

View source version on businesswire.com: https://www.businesswire.com/news/home/20251031195539/en/