Best’s News & Research Service - August 30, 2019 12:38 PM (EDT)
AM Best Revises Outlooks to Positive for Utica Mutual Insurance Company and Its Affiliates
- August 30, 2019 12:38 PM (EDT)
Oldwick //BestWire// - AM Best has revised the outlooks to positive from stable and affirmed the Financial Strength Rating (FSR) of A- (Excellent) and the Long-Term Issuer Credit Rating (Long-Term ICR) of “a-” of Utica Mutual Insurance Company (Utica Mutual) (New Hartford, NY) and its intercompany pool participants and reinsured affiliates, collectively referred to as Utica. (See below for a detailed listing of the companies.)
The Credit Ratings (ratings) reflect Utica’s balance sheet strength, which AM Best categorizes as strongest, as well as its marginal operating performance, neutral business profile and appropriate enterprise risk management.
The positive outlooks are based on Utica’s improved underwriting and operating results in recent years, driven primarily by favorable loss experience in its leading lines of business, commercial liability and workers compensation, as a result of these companies underwriting initiatives, management of asbestos & environmental (A&E) exposure and expense ratio improvement. Improvement in expense ratio is a result of group’s restructuring efforts including improvement in efficiencies, introduction of new systems, as well as a greater focus on expense control, though it is still elevated relative to the industry average.
Utica’s ratings also recognize the group’s solid risk-adjusted capitalization, strong risk management culture and local market presence in target markets. Further, the ratings take into account management’s continued efforts to achieve rate adequacy, operational efficiencies and reserve stability.
Partially offsetting these positive factors are group’s elevated expense structure, volatility in the longer-term history of underwriting results driven by the earnings drag from asbestos-related charges, the impact of increased losses on its general liability and liquor liability books of business in the Founders Insurance Company subsidiary and weather-related events. Utica sold off the majority of its asbestos liabilities thereby reducing income volatility.
The outlooks have been revised to positive from stable and the FSR of A- (Excellent) and the Long-Term ICR of “a-” affirmed for the following affiliates of Utica Mutual Insurance Company:
- Founders Insurance Company
- Graphic Arts Mutual Insurance Company
- Republic-Franklin Insurance Company
- Utica Lloyd’s of Texas
- Utica National Assurance Company
- Utica National Insurance Company of Ohio
- Utica National Insurance Company of Texas
- Utica Specialty Risk Insurance Company
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.
AM Best is a global rating agency and information provider with a unique focus on the insurance industry.