Best’s News & Research Service - May 18, 2007 02:22 PM (EDT)
A.M. Best Upgrades & Assigns Ratings to Ophthalmic Mutual Insurance Company; Outlook Revised to Stable
OLDWICK, N.J. //BestWire// - A.M. Best Co. has upgraded the financial strength rating (FSR) to A (Excellent) from A- (Excellent) and assigned an issuer credit rating (ICR) of “a” to Ophthalmic Mutual Insurance Company (A Risk Retention Group) (OMIC, San Francisco, CA). The outlook for the FSR has been revised to stable from positive, while the outlook assigned to the ICR is stable.
The ratings reflect OMIC’s strong operating performance, strengthened risk-adjusted capitalization, conservative balance sheet and commitment to pricing and reserving adequacy. The ratings also acknowledge OMIC’s leadership position within the ophthalmic professional liability market and historically strong policyholder retention rate.
OMIC’s strong financial position has been enhanced by management’s response to adverse claim trends as well as rising defense costs by continuing to conservatively establish loss reserves and by implementing appropriate rate adjustments. Recent results have also benefited from the company’s ability to increase its policyholder base as a result of the market dislocation in prior years, legislative reform that has taken place across the country and lower claim frequency.
Through prudent underwriting, effective risk management programs, aggressive claims handling and favorable geographic diversification, OMIC has provided a stable market for professional liability insurance for primarily ophthalmologists who are members of the American Academy of Ophthalmology (AAO) on a national basis. OMIC maintains the exclusive sponsorship of the AAO, which enhances OMIC’s market position and provides additional resources for expansion opportunities.
Offsetting these positive rating factors is OMIC’s narrow spread-of-risk as it operates exclusively in the ophthalmic segment of the medical malpractice market. The ratings also consider the inherent market risks associated with the medical professional liability insurance sector as they relate to price competition, legislative (tort) reform, loss cost trends and regulatory challenges. The outlook is based on OMIC’s solid financial position and sound operating fundamentals.
For Best’s Ratings, an overview of the rating process and rating methodologies, please visit http://www.ambest.com/ratings.