AM Best has downgraded the Long-Term Issuer Credit Rating (Long-Term ICR) to “a” (Excellent) from “a+” (Excellent) and affirmed the Financial Strength Rating (FSR) of A (Excellent) of Erie and Niagara Insurance Association (Erie & Niagara). The outlook of the Long-Term ICR has been revised to stable from negative while the outlook of the FSR is stable. Concurrently, AM Best has affirmed the FSR of A- (Excellent) and the Long-Term ICR of “a-” (Excellent) of Cherry Valley Cooperative Insurance Company (Cherry Valley). The outlook of these Credit Ratings (ratings) is stable. Both companies are domiciled in Williamsville, NY.
The ratings reflect Erie & Niagara’s balance sheet strength, which AM Best assesses as strongest, as well as its adequate operating performance, neutral business profile and appropriate enterprise risk management (ERM).
The downgrading of the Long-Term ICR reflects a revision in Erie & Niagara’s operating performance to adequate from strong, due to sustained pressure on underwriting profitability, elevated loss experience and increased volatility in underlying results primarily driven by weather related events. Erie & Niagara’s geographic concentration exposes it to severe weather events, which have contributed to underwriting volatility. Although Erie & Niagara has historically generated favorable earnings, recent underwriting performance has weakened, reflecting increased loss costs and challenges in achieving targeted underwriting profitability. Erie & Niagara reported a combined ratio of approximately 110.3% through the first six months of 2026, and approximately 105.2% through August 2026, resulting in underwriting losses of approximately $8 million and $6.9 million, respectively. The deterioration reflects elevated loss experience and continued pressure on underwriting margins, despite management’s ongoing rate adjustments and underwriting initiatives. While these corrective actions are expected to support future improvement, the timing and sustainability of the benefits remain uncertain.
Erie & Niagara’s balance sheet strength assessment is supported by risk-adjusted capitalization, as measured by BCAR, which remains at the strongest level, as well as its capital base, favorable liquidity, low underwriting leverage and comprehensive reinsurance program. Erie & Niagara’s neutral business profile reflects its established regional market presence, long-standing agency relationships, and diversified insurance product offerings. The formalized risk monitoring practices, established underwriting controls, catastrophe risk management and comprehensive reinsurance protection support the ERM assessment of appropriate.
The revision of the Long-Term ICR outlook to stable reflects AM Best’s expectation that Erie & Niagara will maintain its overall strongest balance sheet strength, supported by its strongest level of risk-adjusted capitalization, and that management’s ongoing underwriting and pricing initiatives will contribute to a stabilization of operating results at levels consistent with the adequate assessment.
The affirmation of Cherry Valley’s ratings reflects its balance sheet strength, which AM Best assesses as strong, as well as its adequate operating performance, limited business profile and appropriate ERM.
Cherry Valley’s balance sheet strength as measured by BCAR is supported by its strongest level of risk-adjusted capitalization, very conservative investment risk profile, favorable underwriting and loss reserve measures, strong liquidity and a prudent reinsurance program. Partially offsetting these positive factors are Cherry Valley’s limited financial flexibility and scale of operations, concentrated business profile and historically variable loss reserve development. Cherry Valley’s adequate operating performance assessment is supported by its history of profitable operating results, favorable underwriting performance and consistent investment income. Cherry Valley’s business profile is limited with its concentrated business model focused on umbrella coverage exclusively sold through Erie & Niagara. The stable outlooks reflect AM Best’s expectation that Cherry Valley will maintain its strong overall balance sheet strength assessment supported by risk-adjusted capitalization at the strongest level, as measured by BCAR, through continued favorable operating results. AM Best expects there will not be changes in support Cherry Valley receives from Erie & Niagara in terms of sharing all infrastructure, management and employees.
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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