CONTACTS:
FOR IMMEDIATE RELEASE
OLDWICK - OCTOBER 02, 2018 10:03 AM (EDT)
A.M. Best has revised the outlooks to negative from stable and affirmed the Financial Strength Rating of A- (Excellent) and the Long-Term Issue Credit Rating of “a-” of Kentucky Employers’ Mutual Insurance (KEMI) (Lexington, KY).
The ratings reflect KEMI’s balance sheet strength, which A.M. Best categorizes as very strong, as well as its adequate operating performance, limited business profile and appropriate enterprise risk management.
The outlook revisions to negative largely reflect the uncertainty of the company’s exposure, partly arising from its position as a writer of last resort in Kentucky, to occupational disease claims from coal mining operations, particularly those brought under the Federal Coal Mine Health & Safety Act (FCMHSA). While it appears that KEMI is estimating loss reserves for those occupational disease exposures more conservatively, further pressure on its balance sheet may occur as the new reserving methodology was implemented just recently. In addition, year-to-year frequency for FCMHSA claims is sporadic as it tends to be closely correlated to mine closures.
This press release relates to Credit Ratings that have been published on A.M. 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 A.M. Best’s Recent Rating Activity web page. For additional information regarding the use and limitations of Credit Rating opinions, please view Understanding Best’s Credit Ratings. For information on the proper media use of Best’s Credit Ratings and A.M. Best press releases, please view Guide for Media - Proper Use of Best’s Credit Ratings and A.M. Best Rating Action Press Releases.
A.M. Best is a global rating agency and information provider with a unique focus on the insurance industry.