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FOR IMMEDIATE RELEASE
OLDWICK, N.J. - DECEMBER 02, 2010 12:00 AM (EST)
A.M. Best Co. has revised the outlook to negative from stable and affirmed the financial strength rating of B++ (Good) and issuer credit rating of "bbb" of Wayne Mutual Insurance Company (Wayne) (Wooster, OH).
The affirmation of the ratings reflects Wayne Mutual's adequate risk-adjusted capitalization, as well as its market expertise and longtime agency relationships in the Ohio marketplace. In addition, the company continues to refine its underwriting criteria and implement rate increases where necessary.
These positive factors are somewhat offset by Wayne Mutual's recent variable underwriting performance as a result of frequent and severe weather events over the past several years, which continue to impact Ohio. As a result, a downward trend in risk-adjusted capitalization has occurred in recent years, in conjunction with elevated underwriting leverage ratios. In addition, the company's 2009 affiliation with Washington Mutual Insurance Association (Washington) resulted in an increased risk profile and elevated leverage measures for Wayne Mutual, as it assumed 100% of Washington's business via a quota share agreement.
The negative outlook reflects A.M. Best's concern with Wayne Mutual's continuing deterioration in underwriting results, with an ensuing unfavorable trend in the company's level of risk-adjusted capitalization.
The principal methodology used in determining these ratings is Best's Credit Rating Methodology - Global Life and Non-Life Insurance Edition, which provides a comprehensive explanation of A.M. Best's rating process and highlights the different rating criteria employed. Additional key criteria utilized include: "Risk Management and the Rating Process for Insurance Companies"; "Understanding BCAR for Property/Casualty Insurers." Methodologies can be found at www.ambest.com/ratings/methodology.
Founded in 1899, A.M. Best Company is the world's oldest and most authoritative insurance rating and information source.