NOVEMBER 18, 2015 02:05:18 Eastern Standard Time

A.M. Best Revises Outlook to Negative for Members of the Oregon Mutual Group

 Lewis DeLosa
Financial Analyst
(908) 439-2200, ext. 5529

Rick Decker
Assistant Vice President
(908) 439-2200, ext. 5423

Christopher Sharkey
Manager, Public Relations
(908) 439-2200, ext. 5159

Jim Peavy
Assistant Vice President, Public Relations
(908) 439-2200, ext. 5644


OLDWICK - NOVEMBER 18, 2015 02:05:18 Eastern Standard Time
A.M. Best has revised the outlook to negative from stable and affirmed the financial strength rating of A- (Excellent) and the issuer credit ratings of “a-” of Oregon Mutual Insurance Company and Western Protectors Insurance Company, which are both domiciled in McMinnville, Oregon and members of the Oregon Mutual Group.

The rating actions reflect Oregon Mutual Group’s deterioration in operating performance, geographic risk concentration and recently adverse reserve development. Recent underwriting losses have been driven by trends in the personal auto lines segment, as well as deterioration in the group’s Nevada book of business. In addition, the group maintains an elevated expense ratio, which is considerably higher than the composite average.

Partially offsetting these negative rating factors are the group’s adequate risk-adjusted capitalization, well-established regional market presence and initiatives implemented to improve profitability. Initiatives include rate increases, targeting growth in profitable lines of business and demographics and utilizing predictive modeling to evaluate and manage exposures. Furthermore, the group is exiting the Nevada market and will have no policies inforce after May 2016. These strengths are also supported by the group’s longstanding agency relationships.

Factors that could trigger negative rating actions include continued deterioration in the group’s operating performance or if there were a considerable deterioration in capital strength as measured by Best’s Capital Adequacy Ratio (BCAR) model. Factors that could trigger stabilization in the ratings include sustained improvement in operating performance and surplus growth.

This press release relates to rating(s) 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 visit A.M. Best’s Ratings & Criteria Center.

A.M. Best Company is the world’s oldest and most authoritative insurance rating and information source.

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