AM Best has placed under review with negative implications the Financial Strength Rating of A- (Excellent) and the Long-Term Issuer Credit Rating of “a-” (Excellent) of The Northern Neck Insurance Company (Northern Neck) (Irvington, VA).

Northern Neck’s Credit Ratings (ratings) have been placed under review with negative implications following the recent announcement that a stock purchase agreement has been signed with Frederick Mutual Insurance Company (Frederick). Frederick is jointly owned by Frederick Mutual Group, Inc. (stock corporation with majority ownership) and Mutual Capital Investment Fund (MCIF). The stock purchase agreement is a definitive agreement to purchase MCIF’s preferred stock. Upon closing, the preferred stock will convert to common stock. Post-transaction close management intends to pool results for both companies.

The under review with negative implications status reflects potential pressure on Northern Neck’s operating performance assessment as it relates to the consolidated results of the prospective group, while also reflecting the need to evaluate medium-term strategic expectations. Pooling is expected to provide broader product and geographic diversification, greater economies of scale and increased operational efficiencies. The ratings will remain under review with negative implications pending regulatory approval and until AM Best fully analyzes the impact of Northern Neck post-transaction rating fundamentals. The transaction is expected to close before the end of 2025.

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.

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