AM Best


A.M. Best Revises Outlook to Positive for Certain Subsidiaries of Medical Professional Mutual Insurance Company


CONTACTS:

Vicky Riggs
Financial Analyst
+1 908 439 2200, ext. 5039
vicky.riggs@ambest.com

Charles M. Huber
Assistant Vice President
+1 908 439 2200, ext. 5122
charles.huber@ambest.com
Christopher Sharkey
Manager, Public Relations
+1 908 439 2200, ext. 5159
christopher.sharkey@ambest.com

Jim Peavy
Assistant Vice President, Public Relations
+1 908 439 2200, ext. 5644
james.peavy@ambest.com

FOR IMMEDIATE RELEASE

OLDWICK - JUNE 20, 2016 12:16 PM (EDT)
A.M. Best has revised the outlook to positive from stable and affirmed the financial strength rating (FSR) of A- (Excellent) and the issuer credit rating (ICR) of “a-” of MHA Insurance Company (East Lansing, MI) and Washington Casualty Company (Maple Valley, WA), collectively referred to as MHA Insurance Group. In addition, A.M. Best has affirmed the FSR of A (Excellent) and the ICR of “a” for Medical Professional Mutual Insurance Company (ProMutual), Coverys RRG, Inc., Coverys Specialty Insurance Company, and ProSelect Insurance Company, all members of Coverys Companies (headquartered in Boston, MA). A.M. Best has also affirmed the FSR of A- (Excellent) and ICR of “a-” for Preferred Professional Insurance Company (Preferred Professional) (Omaha, NE). The outlook for each of these ratings remains stable.

The ratings affirmation of the MHA Insurance Group members is based upon strong risk-adjusted capitalization and profitable operating performance. The group also benefits from belonging to the Coverys organization, led by ProMutual, through loss prevention programs and extensive enterprise risk management programs. Partially offsetting these positive rating factors are underwriting losses in each of the past four years, a concentration in underwriting risk in medical professional liability lines (MPL) and weakened investment income growth due to the low interest rate environment. Furthermore, competition in the MPL sector is strong, pricing is soft and significant changes in health care delivery present challenges to achieving underwriting profitability.

However, A.M. Best recognizes the ongoing efforts being made to integrate the MHA Insurance Group into Coverys and the positive ratings outlook is indicative of those efforts and implicit support from ProMutual.

Positive rating action could result from continued successful integration into the Coverys family of companies while demonstrating its continued support for ProMutual’s business plan. In addition, positive rating action could also result from long-term favorable operating performance while maintaining or strengthening risk-adjusted capitalization. Negative rating action could occur if an adverse trend in operating performance develops. Negative rating action could also occur if risk-adjusted capitalization significantly weakens from either adverse reserve development, severe shock losses, a material increase in claims frequency or dividend payments.

The affirmation of the ratings for the Coverys Companies is based on strong risk-adjusted capitalization, profitable operating performance and effective enterprise risk management. The ratings also benefit from the leadership position of ProMutual and its insurance subsidiaries as one of the largest providers of medical professional liability insurance in the U.S. based on direct written premium.

The ratings for Preferred Professional are reflective of supportive balance sheet strength and profitable operating performance driven by underwriting income on top of investment returns. This is partially offset by a concentration of underwriting risk in MPL lines, declining premium volume and an above average dependence upon reinsurance.

This press release relates to rating(s) that have been published on A.M. 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 A.M. Best’s Recent Rating Activity web page.

A.M. Best is the world’s oldest and most authoritative insurance rating and information source.


Related Companies

For information about each company, including the Best's Credit Reports, group members (where applicable) and news stories, click on the company name. An additional purchase may be required.