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FOR IMMEDIATE RELEASE
OLDWICK - JUNE 14, 2023 02:47 PM (EDT)
AM Best has revised the outlooks to stable from positive and affirmed the Financial Strength Rating of A (Excellent) and the Long-Term Issuer Credit Rating of “a+” (Excellent) of West Bend Mutual Insurance Company (West Bend) (West Bend, WI).
The Credit Ratings (ratings) reflect West Bend’s balance sheet strength, which AM Best assesses as strongest, as well as its adequate operating performance, neutral business profile and appropriate enterprise risk management (ERM).
The revised outlooks reflect the decline the company’s 2022 operating results primarily resulting from an abnormal level of catastrophe losses in its core states of operation, along with increasing loss costs exacerbated by macroeconomic trends. In 2022, the group incurred multiple severe weather events driving the largest underwriting loss in West Bend’s history as inflationary pressures have increased the severity of claims, driving up loss costs considerably. Consequently, the company’s combined ratio was above breakeven for year-end 2022 and remained elevated through the first quarter of 2023. Also in 2022, underwriting losses coupled with unrealized losses from significant market volatility drove a 5.2% decline in surplus for the first time since 2008.
Management is addressing the operating volatility through rate and aggressive underwriting actions. Management initiatives are not expected to significantly materialize until 2024, which has led to the revised outlook. Based on the company’s reported results for 2022 and projected operating performance for 2023, West Bend’s overall operating results align more closely with other adequately assessed rated carriers.
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.