Moody's ups First Mercury

Moody's Investors Service said it has upgraded the insurance financial strength rating of First Mercury Insurance Co. to Baa2 from Baa3, and the long-term issuer rating of its parent company, First Mercury Financial Corp., to Ba2 from Ba3.

The outlook is stable.

The rating action concludes a review for possible upgrade that was initiated on Dec. 19, 2007, the agency said.

Moody's noted that the company's achievement of Section 404 compliance was an important factor in the upgrade of the ratings, as was its ability to maintain solid profit margins in its core business.

First Mercury's ratings reflect the company's established position in providing general and professional liability insurance for the security industry (e.g., security guards), its modest catastrophe exposure, strong profit margins in its core business, and fee income from certain subsidiaries, the agency added.

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