Sign In  |  Register  |  About Los Altos  |  Contact Us

Los Altos, CA
September 01, 2020 1:26pm
7-Day Forecast | Traffic
  • Search Hotels in Los Altos

  • CHECK-IN:
  • CHECK-OUT:
  • ROOMS:

AM Best Downgrades Credit Ratings of Mennonite Mutual Insurance Company

AM Best has downgraded the Financial Strength Rating to B++ (Good) from A- (Excellent) and the Long-Term Issuer Credit Rating to “bbb+” (Good) from “a-” (Excellent) of Mennonite Mutual Insurance Company (MMIC) (Orrville, OH). The outlook of these Credit Ratings (ratings) has been revised to stable from negative.

The ratings reflect MMIC’s balance sheet strength, which AM Best assesses as very strong, as well as its adequate operating performance, limited business profile and appropriate enterprise risk management (ERM).

The downgrading of the ratings reflects the volatility in operating performance in recent years. Results have primarily been influenced by escalation in losses driven by an increase in frequency and severity in weather events coupled with inflationary and supply chain pressures. While fire losses returned to normal frequency after a spike in 2022, catastrophe losses continued to rise in both frequency and severity over the last two plus years. While MMIC has reported mounting underwriting losses, pre-tax losses have only been reported in 2023. Although there has been an improvement in results through the current year, results remain elevated; however, this is typical as MMIC’s results reflect a cyclical nature regarding its operating metrics. The first half of the year is considered to be a storm season with results showing improvements by the end of the year. Ultimately, the deterioration in more recent years has skewed the company’s five-year average operating return measures, as it turned negative and lagged the commercial property and personal property composites. Additionally, volatility in operating performance has led MMIC’s operating performance to underperform companies that have a strong operating performance assessment. Management has implemented significant initiatives inclusive of rate increases to offset higher loss costs and ongoing underwriting actions to drive more refined risk selection and improve weather resilience.

The ratings reflect MMIC’s balance sheet strength, which AM Best assesses as very strong. The business profile assessment reflects the company’s limited geographic spread of risk in two states, although business is split between commercial and personal properties. MMIC’s ERM practices remain appropriate and in line with its risk profile and foster a strong risk management culture with a focus on catastrophe management and rate adequacy.

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.

Copyright © 2024 by A.M. Best Rating Services, Inc. and/or its affiliates. ALL RIGHTS RESERVED.

Contacts

Data & News supplied by www.cloudquote.io
Stock quotes supplied by Barchart
Quotes delayed at least 20 minutes.
By accessing this page, you agree to the following
Privacy Policy and Terms and Conditions.
 
 
Copyright © 2010-2020 LosAltos.com & California Media Partners, LLC. All rights reserved.