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FOR IMMEDIATE RELEASE
OLDWICK, N.J. - MAY 21, 2013 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 rating of “a-” of MMG Insurance Company (MMG) (Presque Isle, ME).
The rating actions reflect MMG’s solid risk-adjusted capitalization, historically strong operating income and its market position as a leading personal lines and small commercial writer in the Northern New England states. The ratings also acknowledge the group’s favorable loss reserve development and low investment leverage.
Partially offsetting these positive rating factors is MMG’s narrow geographic concentration of business in the Northern New England states. The company’s increased commercial and Pennsylvania writings have provided some product and geographic diversification; however, this does create greater property catastrophe risk. Nevertheless, MMG does continue to maintain an effective reinsurance program to help mitigate the effects of severe weather-related events.
MMG’s ratings could further benefit from producing a consistently favorable earnings trend while maintaining strong risk-adjusted capitalization. However, the ratings and outlook may come under negative pressure if an unfavorable earnings trend develops and its capital deteriorates.
The methodology used in determining these ratings is Best’s Credit Rating Methodology, which provides a comprehensive explanation of A.M. Best’s rating process and contains the different rating criteria employed in the rating process. Best’s Credit Rating Methodology can be found at www.ambest.com/ratings/methodology.
A.M. Best Company is the world’s oldest and most authoritative insurance rating and information source.