CONTACTS:
FOR IMMEDIATE RELEASE
OLDWICK - FEBRUARY 03, 2023 08:52 AM (EST)
AM Best has revised the outlooks to stable from positive and affirmed the Financial Strength Rating of B++ (Good) and the Long-Term Issuer Credit Rating of “bbb+” (Good) of PEMCO Mutual Insurance Company (PEMCO) (Seattle, WA).
The ratings reflect PEMCO’s balance sheet strength, which AM Best assesses as very strong, as well as its marginal operating performance, neutral business profile and appropriate enterprise risk management (ERM).
The revised outlooks reflect a deterioration in underwriting and operating performance in recent years. Despite an improvement in operating performance in years preceding 2021, more recent periods have seen a resurgence of negative trends, resulting in underwriting and net losses. While the company has been challenged by higher loss severity and increased frequency as compared with pandemic lows, PEMCO has implemented several underwriting initiatives in an effort to return to profitability, including pursuing rate adequacy and adjusting underwriting rules.
PEMCO’s very strong balance sheet is supported by risk-adjusted capital at the strongest level, as measured by Best’s Capital Adequacy Ratio (BCAR), and moderate underwriting leverage measures, somewhat offset by historically adverse loss reserve development. The neutral business profile assessment reflects its long-standing market presence in the Pacific Northwest and multichannel distribution platform. AM Best considers PEMCO’s ERM to be appropriate for the risk profile of the organization.
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.