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FOR IMMEDIATE RELEASE
OLDWICK, N.J. - MAY 16, 2011 12:00 AM (EDT)
A.M. Best Co. has revised the outlook to negative from stable and affirmed the financial strength rating of A (Excellent) and issuer credit rating of "a" of Badger Mutual Insurance Company (Badger) (Milwaukee, WI).
The negative outlook reflects the deterioration in Badger's underwriting results, coupled with losses to the company's surplus in recent years. The deterioration in underwriting performance was due to Badger's exposure to significant weather-related losses, which led to three consecutive years of negative underwriting performance.
The affirmation of the ratings reflects Badger's strong risk-adjusted capitalization and long-term agency relationships.
The principal methodology used in determining these ratings is Best's Credit Rating Methodology - Global Life and Non-Life Insurance Edition, which provides a comprehensive explanation of A.M. Best's rating process and highlights the different rating criteria employed. Additional key criteria utilized include: "Risk Management and the Rating Process for Insurance Companies"; "Catastrophe Risk Management Incorporated Within the Rating Analysis"; "Catastrophe Analysis in A.M. Best Ratings"; "Understanding BCAR for Property/Casualty Insurers"; and "Natural Catastrophe Stress Test Methodology." Methodologies can be found at www.ambest.com/ratings/methodology.
Founded in 1899, A.M. Best Company is the world's oldest and most authoritative insurance rating and information source.