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FOR IMMEDIATE RELEASE
OLDWICK, N.J. - MAY 13, 2009 02:00 PM (EDT)
A.M. Best Co. has revised the outlook to stable from positive and affirmed the financial strength rating of A- (Excellent) and issuer credit rating of "a-" of MMG Insurance Company (MMG) (Presque Isle, ME).
The revised outlook reflects MMG's declining operating results for the past two years, which were caused by significant weather activity and increased fire losses.
The ratings of MMG recognize its strong risk-adjusted capitalization and long-standing agency relationships. MMG's risk-adjusted capital position is supported by diversified and conservative asset risk and modest underwriting risk. Capitalization was enhanced through two trust preferred issuances and a common and preferred stock issuance, which effectively allowed underwriting leverage to be maintained while modest premium growth occurred.
Partially offsetting these positive rating factors is the company's exposure to localized storm losses, regulatory actions and competitive market pressures in its rather limited operating territory.
For Best's Credit Ratings, an overview of the rating process and rating methodologies, please visit Best's Ratings & Analysis.
The principal methodologies used in determining these ratings, including any additional methodologies and factors that may have been considered, can be found at Best's Credit Rating Methodology.
Founded in 1899, A.M. Best Company is a global full-service credit rating organization dedicated to serving the financial and health care service industries, including insurance companies, banks, hospitals and health care system providers.