Press Release - JUNE 03, 2019
AM Best Withdraws Credit Ratings of MutualAid eXchange
FOR IMMEDIATE RELEASE
OLDWICK - JUNE 03, 2019
The ratings reflect MAX’s balance sheet strength, which AM Best categorizes as strong, as well as its marginal operating performance, limited business profile and marginal enterprise risk management (ERM).
MAX’s balance sheet strength reflects risk-adjusted capitalization at the strongest level and a conservative investment portfolio that is largely comprised of fixed-income holdings, which are somewhat offset by its elevated underwriting leverage relative to the composite and limited financial flexibility. The company’s operating performance has been volatile over the past several years, driven mostly by weather-related events. MAX maintains a limited business profile that reflects its product line concentration in homeowners and farmowners operating as a reciprocal insurer that provides insurance products to faith-based communities and mutual aid ministries. Despite expanding into new states in recent years, MAX’s geographic concentration in the Midwest and Mid-Atlantic states exposes its results to weather-related losses. The company’s ERM framework is developing; however, certain key elements have proven inadequate given the continued volatility in underwriting results.
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 Understanding Best’s Credit Ratings. For information on the proper media use of Best’s Credit Ratings and AM Best press releases, please view Guide for Media - Proper Use of Best’s Credit Ratings and AM Best Rating Action Press Releases.
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