CONTACTS:
FOR IMMEDIATE RELEASE
OLDWICK, N.J. - JUNE 13, 2013 12:00 AM (EDT)
A.M. Best Co. has revised the outlook to positive from stable and affirmed the financial strength rating of A- (Excellent) and the issuer credit rating of “a-“ of The Mutual Risk Retention Group, Inc (The Mutual) (Honolulu, HI).
The revised outlook reflects the long-term profitability enhanced by The Mutual’s defensible niche, management’s expertise within its market of emergency physician liability coverage and its commitment to continued operating profitability and maintenance of reserve adequacy and supportive capitalization.
The ratings of The Mutual are reflective of its excellent capitalization, long-term underwriting and operating profitability, as well as the advantages gained from its core specialty focus and close strategic alignment with CEPAmerica. The ratings further acknowledge the company’s strict underwriting guidelines, low expense structure and high level of customer service, including active risk management strategies, insurance solutions and aggressive defense of non-meritorious claims.
Partially offsetting these positive factors are The Mutual’s risk profile given its narrow line of business focus on emergency medicine and hospitalist specialties within medical professional liability and the geographic concentration of risk in California. Furthermore, CEPAmerica represents the majority of policyholders, which accounts for over 95% of its total book of business. This concern is mitigated somewhat by the interdependence from a strong long-term relationship between the client and The Mutual, as a cohesive group.
The Mutual provides medical professional liability coverage for physicians representing over three million emergency medicine patient visits in Arizona, California, Georgia, Illinois, Kentucky, Oregon, Texas and Washington. This includes the California Emergency Physicians Medical Group (CEP), which represents by far the dominant share of The Mutual’s total premium writings.
While the outlook is positive, an upgrading of the ratings for The Mutual could result from continued long-term favorable performance on both an underwriting and operating basis and the consistent generation of surplus and maintenance of strong capitalization.
The outlook could be revised and/or the ratings could be downgraded as a result of adverse underwriting performance due to significant claims and inadequate loss reserves, or rapid exposure growth, which could cause the level of capitalization to no longer support The Mutual’s ratings.
The methodology used in determining these ratings is Best’s Credit Rating Methodology, which provides a comprehensive explanation of A.M. Best’s rating process and contains the different rating criteria employed in the rating process. Best’s Credit Rating Methodology can be found at www.ambest.com/ratings/methodology.
A.M. Best Company is the world’s oldest and most authoritative insurance rating and information source.