Best’s News & Research Service - September 12, 2023 10:14 AM (EDT)
AM Best Revises Issuer Credit Rating Outlook to Negative for Member Companies of Ohio Mutual Insurance Group
- September 12, 2023 10:14 AM (EDT)
Oldwick //BestWire// - AM Best has revised the outlook to negative from stable for the Long-Term Issuer Credit Ratings (Long-Term ICRs) and affirmed the Financial Strength Rating (FSR) of A (Excellent) and the Long-Term ICRs of “a+” (Excellent) for members of Ohio Mutual Insurance Group (OMIG) (Bucyrus, OH). The outlook of the FSR is stable. See below for a detailed listing of the companies and Credit Ratings (ratings).
The ratings reflect OMIG’s balance sheet strength, which AM Best assesses as strongest, as well as its strong operating performance, neutral business profile and appropriate enterprise risk management.
The revised outlook of the Long-Term ICRs considers the elevated underwriting results OMIG has produced in the past year and a half, primarily resulting from an abnormal level of catastrophe losses in its core states of operation, along with an increased severity of loss due to an increase in inflation. In 2022, the group incurred two severe weather-related events, one of which was the second-largest event in OMIG’s history. Consequently, OMIG reported its largest underwriting loss in company history in 2022 and the combined ratio was above breakeven. Also in 2022, underwriting losses coupled with unrealized capital losses due to stock market volatility resulted in the group reporting a nearly 8% decline in policyholders’ surplus. Similarly, through 2023, the group has incurred two severe weather-related events, both of which were in the vicinity of its catastrophe retention and the group absorbed all losses. While the market volatility has corrected somewhat in 2023, underwriting losses have continued through the first half of the year.
OMIG’s management is addressing the volatility through rate, inflation adjustments, aggressive reunderwriting of its book of business, non-renewing particular coverages, in-depth inspections and requiring higher deductibles. AM Best expects that these actions will allow OMIG to improve upon its current level of performance and return to historical norms.
The FSR of A (Excellent) and the Long-Term ICRs of “a+” (Excellent) have been affirmed with the outlooks of the Long-Term ICRs revised to negative from stable, while the outlook of the FSR is stable, for the following members of the Ohio Mutual Insurance Group:
- Casco Indemnity Company
- Ohio Mutual Insurance Company
- United Ohio Insurance Company
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.