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Press release from Business Wire

A.M. Best Assigns Ratings to Philmont Insurance Company

Wednesday, June 05, 2013

A.M. Best Assigns Ratings to Philmont Insurance Company

13:45 EDT Wednesday, June 05, 2013

OLDWICK, N.J. (Business Wire) -- A.M. Best Co. has assigned a financial strength rating of B++ (Good) and an issuer credit rating of “bbb+” to Philmont Insurance Company (Philmont) (Burlington, VT). The outlook assigned to both ratings is stable.

The ratings and outlook reflect Philmont's strong capitalization and conservative operating strategy. The ratings also consider the company's critical role and favorable profile as part of the Toll Brothers, Inc. (NYSE: TOL) organization, as well as its strong operating performance during the past five years providing insurance coverage to various projects and subsidiaries of Toll Brothers, Inc. for certain liability risks.

Partially offsetting these positive rating factors are Philmont's relatively large reserves and its incurred but not reported reserves. Nevertheless, A.M. Best recognizes the strong liquidity position of Philmont and the substantial financial resources of the Toll Brothers, Inc. organization.

A.M. Best views Philmont's management and corporate strategy as a strengthening factor for the ratings, given its conservative underwriting, operational goals and transparency. A.M. Best views Philmont's enterprise risk management practices as strong given their impact on the company's conservative risk culture, defined risk controls and the optimizing of its capital and surplus. Other factors A.M. Best considered in the assigning of the ratings include, but are not limited to, Philmont's diversification in its line of business and geography, as well as the support and commitment of its parent and its own mission.

A.M. Best expects Philmont's future operating performance to be stable but strong, and the stable earnings profile should further support its growth and business writing, which is consistent with its capital and surplus position.

Philmont's ratings and outlook are not expected to be upgraded within the next 12-24 months as its operating performance and capital position have already been considered in the ratings process. A.M. Best could downgrade the company's ratings and/or revise the outlook if its Best's Capital Adequacy Ratio (BCAR) score declines, operating performance and risk profile deteriorate, insured losses deplete capital, significant changes and turnover occur in its management team and/or risk management controls and tolerances, or Toll Brothers, Inc.'s ratings deteriorate.

A.M. Best remains the leading rating agency of alternative risk transfer entities, with more than 200 such vehicles rated in the United States and throughout the world. For current Best's Credit Ratings and independent data on the captive and alternative risk transfer insurance market, please visit www.ambest.com/captive.

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. Best's Credit Rating Methodology can be found at www.ambest.com/ratings/methodology.

A.M. Best Company is the world's oldest and most authoritative insurance rating and information source. For more information, visit www.ambest.com.

Copyright © 2013 by A.M. Best Company, Inc. ALL RIGHTS RESERVED.

A.M. Best Co.
Fred Eslami, 908-439-2200, ext. 5406
Senior Financial Analyst
fred.eslami@ambest.com
or
Steven Chirico, CPA, 908-439-2200, ext. 5087
Assistant Vice President
steven.chirico@ambest.com
or
Rachelle Morrow, 908-439-2200, ext. 5378
Senior Manager, Public Relations
rachelle.morrow@ambest.com
or
Jim Peavy, 908-439-2200, ext. 5644
Assistant Vice President, Public Relations
james.peavy@ambest.com

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