CONTACTS:
FOR IMMEDIATE RELEASE
OLDWICK, N.J. - JUNE 04, 2010 12:00 AM (EDT)
A.M. Best Co. has revised the outlook to positive from stable and affirmed the financial strength rating of A- (Excellent) and issuer credit ratings of "a-" of MAG Mutual Group (MAG Mutual) (Atlanta, GA) and its members. (See below for a detailed listing of the companies.)
The ratings of MAG Mutual reflect its excellent capitalization, strong operating profitability over the recent period and its leadership position in providing medical professional liability coverage to healthcare providers in Georgia. Additionally, MAG Mutual has well a seasoned geographic spread of business in contiguous states in the Southeast, where it derives over half of its premium volume. The ratings also consider MAG Mutual's favorable underwriting results generated by sizeable loss reserve redundancies taken during the past three years, reflective of the group's favorable reserving position.
Partially offsetting these positive rating factors are MAG Mutual's concentration risk by product and the potential challenges related to changes to tort reform in Georgia, as well as heightened competition and the inherent volatility in the medical professional liability line.
The outlook reflects the group's improved level of capitalization, the anticipated maintenance of positive underwriting results despite the recent loss of a cap on non-economic damages in Georgia, while adhering to its cycle management practices.
Over the last five years, MAG Mutual's operating profitability has benefited from positive trends within the medical professional liability sector and through management's initiatives of improving rate adequacy and reducing policy limits, in addition to the recent implementation of various corporate management tools and enterprise risk management initiatives.
These positive factors have been somewhat offset by MAG Mutual's increase in premium volume and related liabilities in years prior to the most recent five-year period. MAG Mutual has consistently maintained a high policyholder retention rate given its whole account management approach and demonstrated ability to respond to client needs.
The FSR of A- (Excellent) and ICRs of "a-" have been affirmed for MAG Mutual Group and its following members:
-MAG Mutual Insurance Company
-Professional Security Insurance Company
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.