AM Best has downgraded the Long-Term Issuer Credit Rating (Long-Term ICR) to “a” (Excellent) from “a+” (Excellent) and affirmed the Financial Strength Rating (FSR) of A (Excellent) of Tuscarora Wayne Insurance Company and its affiliate, Keystone National Insurance Company. The outlook of the Long-Term ICR has been revised to stable from negative while the FSR is stable. Both companies are collectedly referred to as Tuscarora Wayne Companies and are domiciled in Wyalusing, PA.

Concurrently, AM Best has upgraded the FSR to A- (Excellent) from B++ (Good) and the Long-Term ICR to “a-” (Excellent) from “bbb+” (Good) of Lebanon Valley Insurance Company (Lebanon Valley) (Wyalusing, PA). The outlook of these Credit Ratings (ratings) is positive.

In addition, AM Best has revised the outlooks to positive from stable and affirmed the FSR of A- (Excellent) and the Long-Term ICR of “a-” (Excellent) of Illinois Casualty Company (ICC). AM Best also has revised the outlook to positive from stable affirmed the Long-Term ICR of “bbb-” (Good) of its intermediate parent, ICC Holdings, Inc. (ICCH). Lastly, AM Best has withdrawn the rating of ICCH as the company requested its withdrawal following ICCH’s transition to a privately held entity from a publicly held company. Both companies are domiciled in Rock Island, IL.

The ratings of Tuscarora Wayne Companies reflect the group’s balance sheet strength, which AM Best assesses as very strong, as well as its adequate operating performance, neutral business profile and appropriate ERM.

The downgrade of Tuscarora Wayne Companies’ Long Term ICRs reflects operating performance metrics that more closely align with adequately assessed companies within the commercial property composite. The group’s very strong balance sheet strength assessment continues to be supported by the strongest level of risk-adjusted capitalization, as measured by Best’s Capital Adequacy Ratio (BCAR), solid liquidity and generally consistent and favorable loss reserve development, partially offset by dividends to its parent, which has somewhat constrained surplus growth. The neutral business profile continues to focus on underserved commercial business exposures with moderate geographic diversification. AM Best considers Tuscarora Wayne Companies’ ERM program to be appropriate for the group’s risk profile and includes prudent reinsurance protection and comprehensive risk management.

The ratings of Lebanon Valley reflect its balance sheet strength, which AM Best assesses as strong, as well as its adequate operating performance, limited business profile and appropriate ERM. The ratings also reflect rating enhancement via the explicit and implicit support provided as an affiliate of Tuscarora Wayne Companies.

The upgrade of Lebanon Valley’s ratings reflects its consistent surplus growth, with gains in surplus reported in each of the past 10 years, conservative investment portfolio and low underwriting leverage metrics that compare favorably with the composite average. The strong balance sheet strength assessment is underpinned by the strongest levels of risk-adjusted capitalization, as measured by BCAR. The adequate operating performance reflects the consistent performance of the company with net income in each of the past 10 years, with some modest volatility as reflected in underwriting losses in 2021 and 2023. The limited business profile reflects the company’s geographic concentration in Pennsylvania and focus on commercial property business. The company is part of the ERM program employed by Tuscarora Wayne Companies and is considered appropriate for the company’s risk profile. The positive outlooks reflect the expected product and geographic diversification the company will achieve via the implementation of a pooling agreement with Tuscarora Wayne Companies and ICC. The agreement is expected to be implemented by Jan. 1, 2026.

The ratings of ICC reflect its balance sheet strength, which AM Best assesses as very strong, as well as its adequate operating performance, limited business profile and appropriate enterprise risk management (ERM).

The revised outlooks to positive from stable for ICC also contemplate the expected benefits of the forthcoming pooling agreement with its affiliated insurance companies. The pooling agreement will provide greater product diversification through additional commercial multiperil classes and lines of business, such as homeowners’ and farmowners’ coverages, while also improving the geographic reach of the company. ICC’s very strong balance sheet strength is characterized by the strongest level of risk-adjusted capitalization, as measured by BCAR, underwriting and liquidity ratios that are comparable with the composite averages and generally consistent surplus growth. While loss reserve development has been unfavorable in recent periods, influenced by social and economic inflation, the impact has been effectively absorbed without significant drain on the balance sheet. This is reflected by adequate operating performance, which has yielded positive pre-tax operating and net income in each of the past 5 years, despite loss reserve development. The ERM program is considered appropriate for the company’s risk profile.

On March 13, 2025, ICCH was acquired by Mutual Capital Group, Inc. (the ultimate parent of Tuscarora Wayne Companies and Lebanon Valley). ICCH remains a subsidiary under common management with Mutual Capital Group’s other subsidiaries. The prospective pooling agreement between the three rating units is expected to enhance the overall business and geographic diversification.

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.

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