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Best’s News & Research Service - July 19, 2016 03:10 PM (EDT)

A.M. Best Revises Outlook to Stable for MutualAid eXchange

  • July 19, 2016 03:10 PM (EDT)
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Oldwick //BestWire// - A.M. Best has revised the outlook to stable from negative and affirmed the financial strength rating of B+ (Good) and the issuer credit rating of “bbb-” MutualAid eXchange (MAX) (Overland Park, KS).

The revised outlook reflects the favorable trend in underwriting and operating results in recent years attributed to management’s local market knowledge within its faith-based market niche and the numerous corrective initiatives that have started to benefit the company’s results. In addition, A.M. Best expects that the profitability trend observed over recent years will be sustained as a result of management’s ongoing underwriting discipline, adequate pricing and improved enterprise risk management capabilities.

MAX’s ratings reflect its adequate risk-adjusted capitalization and broadened membership which has provided the company an opportunity for future growth in the faith-based markets, in which it has extensive knowledge. In addition, operating results have been further enhanced by increasing non-risk revenue which has favorably impacted bottom line net income. These positive rating factors are partially offset by the impact of weather-related events, competitive pricing and a concentrated risk profile. Due to the company’s geographic concentration in the Midwestern states, its operating results remain exposed to severe weather-related events. However, management has taken steps to mitigate this exposure by actively managing its risk concentrations, individual risk selection and pricing levels.

Future positive rating actions or outlook changes may occur if the company maintains profitable operating performance over several periods with increasing policyholders’ surplus and capital strength.

Possible future negative rating actions may occur if the company falls well below its near-term operating projections or if there is significant deterioration in risk-adjusted capitalization as measured by Best’s Capital Adequacy Ratio (BCAR).

This press release relates to rating(s) that have been published on A.M. 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 A.M. Best’s Recent Rating Activity web page.

A.M. Best is the world’s oldest and most authoritative insurance rating and information source.

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