Best’s News & Research Service - October 16, 2024 02:56 PM (EDT)
AM Best Withdraws Credit Ratings of Southern Mutual Church Insurance Company
- October 16, 2024 02:56 PM (EDT)
//BestWire// - AM Best has removed from under review with negative implications and downgraded the Financial Strength Rating (FSR) to B++ (Good) from A (Excellent) and the Long-Term Issuer Credit Rating (Long-Term ICR) to “bbb+” (Good) from “a” (Excellent) of Southern Mutual Church Insurance Company (SMCIC) (Columbia, South Carolina). The outlook assigned to the FSR is stable, while the outlook assigned to the Long-Term ICR is negative. Concurrently, AM Best has withdrawn these Credit Ratings (ratings) as the company has requested to no longer participate in AM Best’s interactive rating process.
The ratings reflect SMCIC’s balance sheet strength, which AM Best assesses as strong, as well as its adequate operating performance, limited business profile and appropriate enterprise risk management.
The rating downgrades reflect deterioration in SMCIC’s balance sheet strength assessment due to a material decline in surplus as of year-end 2023 and through the first half of 2024, including the issuance of a surplus note in March 2024. In addition, SMCIC has incurred losses from weather-related events that have exceeded expectations in the most recent years and continuing into the first half of 2024 resulting in significant underwriting losses. Given SMCIC’s geographic and product concentrations, its operations remain exposed to frequent and severe weather-related events.
The negative outlook of the Long-Term ICR reflects continuing pressure on the overall balance sheet strength assessment associated with further declines in surplus, and consequently risk-adjusted capitalization. Additionally, the increased volatility in underwriting and overall results has the potential to erode capital and overall balance sheet strength further.
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.