Best’s News & Research Service - February 21, 2014 09:51 AM (EST)
A.M. Best Upgrades Issuer Credit Rating of Millville Mutual Insurance Company and Its Subsidiary
Oldwick //BestWire// - A.M. Best has upgraded the issuer credit rating to "a+" from "a" and affirmed the financial strength rating of A (Excellent) of Millville Mutual Insurance Company (Millville) (Millville, PA) and its wholly-owned and 100% reinsured subsidiary, Millville Insurance Company of New York (Corning, NY) The outlook for all ratings is stable.
The upgrading of the ICR reflects Millville's solid risk-adjusted capitalization, consistently favorable operating performance and a conservative operating philosophy. Operating profitability, driven primarily by solid net underwriting income in most recent years and supplemented by steady net investment income, has enabled Millville to substantially grow surplus over the past five years. The quality of the company's underlying book of business is reflected in pure loss ratios that compare favorably to those of the personal property composite. In addition, the company maintains a favorable underwriting expense ratio. Millville further benefits from its experienced management team and its regional knowledge and expertise in its operating territories.
Partially offsetting these positive rating factors is Millville's geographic risk concentration. With the majority of the company's business concentrated in Pennsylvania, Millville's capital position remains exposed to weather-related catastrophe events and regulatory and competitive market risks. However, a comprehensive reinsurance program reduces the potential impact of catastrophic and frequent weather events.
There could be pressure on Millville's ratings if its historically favorable operating performance is reversed or risk-adjusted capitalization were to weaken.
The methodology used in determining these ratings is Best's Credit Rating Methodology, which provides a comprehensive explanation of A.M. Best's rating process and contains the different rating criteria employed in the rating process. Best's Credit Rating Methodology can be found at www.ambest.com/ratings/methodology.
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