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A.M. Best Upgrades Ratings of Alaska Timber Insurance Exchange

OLDWICK, N.J.--(BUSINESS WIRE)--A.M. Best Co. has upgraded the financial strength rating to A- (Excellent) from B++ (Good) and issuer credit rating to "a-" from "bbb" of Alaska Timber Insurance Exchange (ATIE) (Ketchikan, AK). The outlook for both ratings is stable.

The ratings reflect ATIE's sound capitalization, low cost operating platform and high member retention. Partially offsetting these positive rating factors are ATIE's limited business profile and relatively high retention level.

As a single state, single line writer, ATIE is susceptible to economic and legislative changes. There also exists significant premium and surplus concentration among certain members. This limitation should be somewhat mitigated as the company increases its membership base by building premium volume outside of the timber industry. In prior years, premium volumes decreased due to restrictions on logging in national forest lands and poor market conditions for lumber products.

The company's structure as an exchange allows ATIE to dividend the majority of its earnings to its subscribers. The dividend provides the company with a high member retention level, and because it is based on the company's profitability members, these members are encouraged to become effective risk managers.

For Best's Credit Ratings, an overview of the rating process and rating methodologies, please visit www.ambest.com/ratings.

The principal methodologies used in determining these ratings, including any additional methodologies and factors that may have been considered, can be found at www.ambest.com/ratings/methodology.

Founded in 1899, A.M. Best Company is a global full-service credit rating organization dedicated to serving the financial and health care service industries, including insurance companies, banks, hospitals and health care system providers. For more information, visit www.ambest.com.

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