Best’s News & Research Service - July 28, 2022 03:34 PM (EDT)
AM Best Downgrades Credit Ratings of Associated Mutual Insurance Cooperative
- July 28, 2022 03:34 PM (EDT)
Oldwick //BestWire// - AM Best has downgraded the Financial Strength Rating to B+ (Good) from B++ (Good) and the Long-Term Issuer Credit Rating to “bbb-” (Good) from “bbb” (Good) of Associated Mutual Insurance Cooperative (Associated Mutual) (Woodridge, NY). The outlook of these Credit Ratings (ratings) has been revised to stable from negative.
The ratings reflect Associated Mutual’s balance sheet strength, which AM Best assesses as strong, as well as its marginal operating performance, limited business profile and marginal enterprise risk management (ERM).
The rating downgrades reflect Associated Mutual’s evolving risk management capabilities, which have lacked alignment with its risk profile, specifically in regard to reserve handling and overall operating results. Although ERM initiatives continue to be implemented in business operations, the balance sheet remains pressured by a history of adverse reserve development, elevated reserve leverage relative to its policyholders’ surplus, and continued adverse operating performance. The inability to effectively manage and control these pressure points over time brings the overall effectiveness of the ERM program into question. The revised outlooks to stable from negative reflect the company’s strongest risk-adjusted capitalization, as measured by Best’s Capital Adequacy Ratio (BCAR), which allows for the development of ERM actions to gauge fully their effectiveness in improving these pressure points.
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.