Posted on 26 Jan 2009
Copyright: Business Wire
Source: Business Wire
OLDWICK, N.J.--(BUSINESS WIRE)--January 20, 2009--A.M. Best Co. has revised the outlook to negative from stable and affirmed the financial strength rating of A- (Excellent) and issuer credit rating of “a-” of Michigan Millers Mutual Insurance Company (Michigan Millers) (Lansing, MI).
These rating actions reflect Michigan Millers’ strong risk-adjusted capitalization, historical operating performance, niche market expertise and management’s actions to improve future underwriting results. Offsetting these positive rating factors are the company’s weak underwriting results posted since 2007, the drop in its risk-adjusted capitalization during 2008 and the execution risk associated with management’s various initiatives to return the company to a profitable footing. Furthermore, results remain exposed to both weather-related losses and the weak economic conditions in its primary operating state, Michigan.
Although risk-adjusted capitalization, as measured by Best’s Capital Adequacy Ratio (BCAR), significantly deteriorated in 2008 due to underwriting and investment losses, it continues to support Michigan Millers’ current rating level. Management is committed to returning the company to underwriting profitability through tighter pricing and underwriting strategies with a focus on more profitable business segments.
Michigan Millers’ writes various property/casualty insurance products mainly across the Midwest, New York and (to a lesser degree) the Southwest. Michigan Millers’ operations are organized into two segments: general business and agribusiness, with general business including both commercial and personal lines.
For Best’s Ratings, an overview of the rating process and rating methodologies, please visit www.ambest.com/ratings.
Founded in 1899, A.M. Best Company is a global full-service credit rating organization dedicated to serving the financial and health care service industries, including insurance companies, banks, hospitals and health care system providers. For more information, visit www.ambest.com.