OLDWICK, N.J.–(BUSINESS WIRE)–
AM Best has affirmed the Financial Strength Rating (FSR) of A+ (Superior) and the Long-Term Issuer Credit Ratings (Long-Term ICRs) of “aa” (Superior) of Factory Mutual Insurance Company (Johnston, RI) and its subsidiaries, which are collectively referred to as FM Group. The outlook of these Credit Ratings (ratings) is stable. (See below for a detailed listing of the companies and ratings.)

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

FM Group continues to maintain the strongest level of risk-adjusted capitalization, as measured by Best’s Capital Adequacy Ratio (BCAR). The group’s balance sheet has proven to have long-term resilience against natural catastrophe losses on its commercial property book of business. Significant excess of loss reinsurance capacity plays an integral role in reducing retained risks to a manageable level. Management maintains a conservative reserving philosophy that includes prudently reserving for losses in a timely fashion. Post-catastrophe events ultimate losses are typically, well below their modeled output. FM Group’s excellent knowledge of its risks and expedient settlement of claims enables the group to move on quickly after considerable events.

FM Group reported underwriting profits in each of the most recent five years and is expected to post underwriting profit for full year 2024. The group’s underwriting initiatives focused on improving risk selection and rate adequacy have been effective and translated to net underwriting income in excess of $1 billion in 2022, and $1.6 billion in 2023. Furthermore, FM Group has generated strong investment income and capital gains on its sizeable investment portfolio, which includes an overweight allocation to equity securities. Favorable equity market conditions in recent years have been a key driver of surplus growth. With ongoing solid profitability and corresponding surplus growth, policyholder credits were approved to be paid in 2024, in addition to a “resilience credit” for renewing members.

The stable outlooks reflect AM Best’s expectation that FM Group’s risk-adjusted capitalization and operating performance will continue to exhibit excellent trends. AM Best expects that the group’s ERM practices will continue to drive commensurately strong returns in its niche business model. FM Group’s high-risk tolerance periodically results in volatile underwriting performance due to catastrophe events that management has successfully navigated over the organization’s long history.

Positive rating action may occur with manageable volatility reflected in FM Group’s historically superior underwriting results, warranting a more favorable assessment in the group’s operating performance or ERM.

Negative rating action may occur if risk-based capitalization is materially weakened by deteriorating non-catastrophe underwriting trends or following a prolonged equity market downturn. In addition, negative rating action could result if operating performance erodes materially for an extended period relative to its strong assessment.

The FSR of A+ (Superior) and the Long-Term ICRs of “aa” (Superior) have been affirmed with stable outlooks for Factory Mutual Insurance Company and its following subsidiaries:

• Affiliated FM Insurance Company
• Appalachian Insurance Company
• FM Insurance Europe S.A.

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.

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Connor Brach, CFA, FRM

Associate Director

+1 908 882 1668

[email protected]

Daniel Ryan
Senior Director

+1 908 882 2290

[email protected]

Christopher Sharkey
Associate Director, Public Relations

+1 908 882 2310

[email protected]

Al Slavin
Senior Public Relations Specialist

+1 908 882 2318

[email protected]

Source: AM Best