Best’s News & Research Service - November 30, 2021 02:50 PM (EST)
AM Best Affirms Credit Ratings of MLMIC Insurance Company
- November 30, 2021 02:50 PM (EST)
Oldwick //BestWire// - AM Best has affirmed the Financial Strength Rating (FSR) of A+ (Superior) and the Long-Term Issuer Credit Ratings (Long-Term ICR) of “aa-” (Superior) of MLMIC Insurance Company (MLMIC) (New York, NY). The outlook of these Credit Ratings (ratings) is stable.
The ratings reflect MLMIC’s balance sheet strength, which AM Best assesses as strongest, as well as its adequate operating performance, limited business profile and appropriate enterprise risk management. The ratings also benefit from the financial support provided by MLMIC’s direct parent company, National Indemnity Company, which is ultimately owned by Berkshire Hathaway Inc. [NYSE: BRK.A and BRK.B].
MLMIC has a long track record of favorable reserve development and adequate underwriting returns. In recent years, net operating results have been somewhat skewed by a 100% loss portfolio transfer (LPT) and an 85% quota share agreement with National Indemnity Company, which were executed in 2018. As a result, favorable reserve development related to accident years covered by the LPT (for all business written prior to the acquisition by National Indemnity Company in 2018) no longer benefits MLMIC’s underwriting results. The pace of favorable reserve development was likely further slowed by the impact of the COVID-19 pandemic on the New York court system, which reduced the speed with which claims were closed and delayed the recognition of possible favorable reserve development on more recent accident years that are not covered under the LPT. As such, the company’s net underwriting results in the most recent years have not yet benefited from the same degree of reserve releases seen in previous years. The direct underwriting results remain in line with historical trends, however, and further support the current operating performance assessment.
MLMIC’s insurance portfolio is concentrated in the medical malpractice line of business. The company underwrites risks only within New York state, which is one of the nation’s most challenging markets for medical professional liability. However, management has been able to operate successfully through underwriting cycles while maintaining MLMIC’s leading market position within New York. In addition, risk management capabilities have proven appropriate for the risk profile of the company.
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 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.