A.M. Best has assigned a financial strength rating (FSR) of A++ (Superior) and issuer credit rating(ICR) of "aaa" to GEICO County Mutual Insurance Company (GEICO County) ( Dallas, TX ) (formerly known as Fireman's Fund County Mutual Insurance Company ).
The outlook assigned to both ratings is stable.
The ratings reflect GEICO County's initial adequate risk- adjusted capitalization and brand name recognition, as GEICO Corp. (GEICO) uses this entity to write its Texas auto business. GEICO's considerable underwriting expense advantage is driven by its direct distribution business model, which will be supplemented by the marketing advantages of a county mutual in Texas . A.M. Best expects that GEICO County will reap the benefits derived from utilizing the same infrastructure, platform, management and personnel of its affiliated GEICO companies, as well as reinsurance coverage provided by those affiliates. As a result, A.M. Best anticipates that the direct operating results and risk-adjusted capital position of GEICO County will be commensurate with the other members of GEICO.
Both ratings also recognize the considerable resources and financial strength of GEICO's parent company, National Indemnity Company , as well as its ultimate parent, Berkshire Hathaway Inc.
( Omaha, NE ) (NYSE: BRKa and BRKb), whose financial profile includes approximately $222 billion of stockholders' equity at December 31, 2013 , minimal debt and a long history of strong profitability. Moreover, GEICO maintains modest financial leverage and strong cash flows to fund fixed charges.
Future movement in GEICO County's ratings will be driven by any changes in the ratings of its affiliated companies in GEICO.
The assignment of these ratings follows the acquisition of Fireman's Fund County Mutual Insurance Company (Fireman's Fund County Mutual) by GEICO. As a result of the transaction, A.M. Best has withdrawn the FSR of A (Excellent) and ICR of "a" of Fireman's Fund County Mutual.