Moody's boosts PMA

Moody's Investors Service said it upgraded the senior debt rating of PMA Cos., Inc., formerly PMA Capital Corp., to Baa3 from Ba3.

These actions follow the completion of the merger between PMA and a wholly owned subsidiary of Old Republic International Corp. on Oct. 1, and conclude a review for upgrade that began on June 10.

The outlook is stable.

"PMA's financial flexibility will benefit from being part of a much larger and financially stronger group. Similarly, PMA's market reputation and franchise should benefit from its association with a stronger, better diversified organization," S&P analyst Enrico Leo said in a statement.

PMA's standalone credit profile reflects the company's mono-line workers' compensation franchise with good business flow and stable retention rates, its service proposition to clients and high-quality fixed income portfolio, the agency said.

These positive considerations are offset by the highly competitive nature of workers' compensation insurance, weak historic earnings and the reserving risk inherent in long-tail workers' compensation, the agency noted.

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