AM Best Downgrades Issuer Credit Ratings of Erie Insurance Group’s Members; Affirms Credit Ratings of Erie Family Life Insurance Company

OLDWICK, NJ, August 11, 2022–(BUSINESS WIRE)–AM Best has downgraded the Long-Term Issuer Credit Rating (Long-Term ICR) to “aa-” (Superior) from “aa” (Superior) and affirmed the Financial Strength Rating (FSR) of A+ (Superior) of the property/casualty ( P/C) members of the Erie Insurance Group (Erie). The outlook of the Long-Term ICR has been revised to stable from negative while the outlook of the FSR is stable. Additionally, AM Best has affirmed the FSR of A (Excellent) and the Long-Term ICR of “a” (Excellent) of Erie Family Life Insurance Company (EFL). The outlook of these Credit Ratings (ratings) is stable. All companies are domiciled in Erie, PA, unless otherwise specified.

Erie Insurance Exchange is the lead company of Erie; the remainder of the P/C group is composed of inter-company pooling members, Erie Insurance Company and Erie Insurance Company of New York (Rochester, NY), and reinsured subsidiaries of Erie Insurance Property & Casualty Company and Flagship City Insurance Company.

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

The Long-Term ICR downgrade of Erie reflects a continued trend of volatility and deterioration in the group’s underwriting performance, driven predominantly by weather-related losses. While the group’s operating results improved in 2020, largely from a drop in auto claims frequency and a decrease in weather-related events, Erie’s five- and 10-year operating results continue to lag similarly related peers. Additionally, the combined impact of elevated inflation and supply chain disruptions starting in 2021 and through 2022 has adversely impacted the group’s auto book of business, leading to significant underwriting losses in 2021, which have continued through the first quarter of 2022. While investment performance has generally offset underwriting losses, AM

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