Best’s News & Research Service - May 21, 2021 08:08 AM (EDT)
AM Best Revises Outlooks to Negative for Maine Employers’ Mutual Insurance Company and Its Subsidiaries
- May 21, 2021 08:08 AM (EDT)
Oldwick //BestWire// - AM Best has revised the outlooks to negative from stable and affirmed the Financial Strength Rating of A (Excellent) and the Long-Term Issuer Credit Ratings of “a” (Excellent) of Maine Employers’ Mutual Insurance Company (Portland, ME) and its wholly owned subsidiaries, MEMIC Indemnity Company and MEMIC Casualty Company (both domiciled in Manchester, NH). All three companies collectively are referred to as MEMIC Group.
The Credit Ratings (ratings) reflect MEMIC Group’s balance sheet strength, which AM Best assesses as very strong, as well as its adequate operating performance, neutral business profile and appropriate enterprise risk management.
The negative outlooks reflect a deteriorating trend in operating performance metrics, which compare unfavorably with the workers’ compensation composite. While MEMIC Group has generated net income in each of the last five years, the group has not reported an underwriting gain during this period. MEMIC Group’s five-year average combined ratio after policyholder dividends trails the workers’ compensation composite by over 10 points, due mainly to elevated loss and loss adjustment expenses. Ongoing rate pressure and significant rate decreases, which began in earnest 2014, have impacted the workers’ compensation market in Maine, where MEMIC Group derives 40% of its direct premium written. However, rates are expected to stabilize in 2021, with just a minor increase in loss costs. Negative rating action may result if operating metrics fail to meet projections, continue to materially lag workers’ compensation composite results, or fall short of AM Best’s expectations.
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 media use of Best’s Credit Ratings and AM Best press releases, please view Guide for Media - Proper Use of Best’s Credit Ratings and AM Best Rating Action Press Releases.
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.