AM Best

AM Best Revises Outlooks to Negative for McMillian-Warner Mutual Insurance Company


Lauren Magro
Financial Analyst
+1 908 439 2200, ext. 5181

Joseph Burtone
+1 908 439 2200, ext. 5125

Christopher Sharkey
Associate Director, Public Relations
+1 908 439 2200, ext. 5159

Al Slavin
Senior Public Relations Specialist
+1 908 439 2200, ext. 5098


OLDWICK - MAY 18, 2023 09:02 AM (EDT)
AM Best has revised the outlooks to negative from stable and affirmed the Financial Strength Rating of B+ (Good) and the Long-Term Issuer Credit Rating of “bbb-” (Good) of McMillan-Warner Mutual Insurance Company (MWM) (Marshfield, WI).

These Credit Ratings (ratings) reflect MWM’s balance sheet strength, which AM Best assesses as strong, as well as its marginal operating performance, limited business profile and marginal enterprise risk management.

The revised outlooks reflect deterioration in MWM’s key balance sheet strength metrics, mainly in the form of reduced surplus, declining levels of overall risk-adjusted capitalization, as measured by Best’s Capital Adequacy Ratio (BCAR) and weakening balance sheet metrics. The company’s policyholder surplus declined by nearly 20% in 2022, driven by ongoing volatility on the underwriting side and supplemented by unrealized losses from the equity portfolio given its elevated common stock leverage. Ultimately, this volatility has generated an elevated reliance on reinsurance, rising underwriting and reserve leverage measures and declining levels of liquidity in MWM’s balance sheet.

Though management is focused on managing its exposures effectively and refining its book of business, MWM’s ability to support its current book, along with a growing personal automobile book of business, may be hindered over the near-term with its declining levels of risk-adjusted capitalization. Moreover, reinsurance market conditions may continue to present challenges for MWM in placing its program in a manner consistent with prior years, leading to potential higher retentions and lower limits, as the company experienced in 2022. Should further deterioration occur, the ratings may be downgraded.

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 Guide to Best’s Credit Ratings. For information on the proper use of Best’s Credit Ratings, Best’s Performance Assessments, Best’s Preliminary Credit Assessments and AM Best press releases, please view Guide to Proper Use of Best’s Ratings & Assessments.

AM Best is a global credit rating agency, news publisher and data analytics provider specializing in the insurance industry. Headquartered in the United States, the company does business in over 100 countries with regional offices in London, Amsterdam, Dubai, Hong Kong, Singapore and Mexico City.

Related Companies

For information about each company, including the Best's Credit Reports, group members (where applicable) and news stories, click on the company name. An additional purchase may be required.

AMB# Company Name
012380 McMillan-Warner Mutual Insurance Company