OLDWICK, N.J.–(BUSINESS WIRE)–AM Best has revised the outlooks to positive from stable and
affirmed the Financial Strength Rating (FSR) of A- (Excellent) and the
Long-Term Issuer Credit Rating (Long-Term ICR) of “a-” of Michigan
Millers Mutual Insurance Company (Michigan Millers) (Lansing MI).
Concurrently, AM Best has affirmed the FSR of A+ (Superior) and
the Long-Term ICRs of “aa-” of Western National Mutual Insurance Company
(Edina, MN) and its affiliates, collectively called Western National
Insurance Pool (Western National). The outlook of these Credit
Ratings (ratings) remains stable. (See below for a detailed listing of
companies below).
The ratings of Michigan Miller reflect its balance sheet strength, which
AM Best categorizes as very strong, as well as its marginal operating
performance, limited business profile and appropriate enterprise risk
management (ERM). Michigan Millers’ ratings also benefit from support
from its affiliation with Western National.
The revised outlooks for Michigan Millers’ ratings recognize the
improved operating performance in three consecutive years following its
affiliation with Western National in 2015. AM Best’s assessment of
Michigan Millers’ operating performance as marginal is a function of the
company’s historical, long-term performance. However, since its
affiliation arrangement, the company reported improved operating
earnings in each of the past three years through 2018, primarily driven
by sound and growing investment income coupled with profitable
underwriting results.
The improved underwriting performance is due largely to significant
underwriting initiatives (generated by affiliation arrangement) such as;
exiting the personal lines book of business and a managing general
agency relationship, freezing the defined pension benefit plan and
strengthening of loss reserves, as well as reinsurance protection for
its personal lines run-off book of business from Western National.
Additionally, the ratings reflect Michigan Millers’ very strong balance
sheet strength, based on its strongest level of risk-adjusted
capitalization, as measured by Best’s Capital Adequacy Ratio (BCAR),
conservative investment portfolio, improving liquidity measures and
comprehensive reinsurance program, which is offset partially with the
company’s limited financial flexibility and scale. The ratings also
reflect Michigan Millers’ limited business profile, which is due to the
limited geographical spread in Michigan and New York, which exposes the
company to weather events, as well as potential judicial and regulatory
challenges.
The ratings of Western National reflect the group’s balance sheet
strength, which AM Best categorizes as strongest, as well as its strong
operating performance, neutral business profile and appropriate ERM. The
group maintains the strongest level of risk-adjusted capitalization, as
measured by BCAR, which benefits from stable loss-reserving practices, a
prudent investment portfolio and a comprehensive reinsurance program.
Strong operating performance is demonstrated with favorable underwriting
and operating return measures, which compare favorably with the averages
for the private passenger standard auto and homeowners industry
composite. Western National is a super-regional carrier with
well-diversified geographic representation and product risk spread, as
the group underwrites a variety of commercial and personal lines
products in 20 states.
The FSR of A+ (Superior) and the Long-Term ICRs of “aa-”, each with a
stable outlook have been affirmed for the members of Western National
Insurance Pool.
- Western National Mutual Insurance Company
- Western National Assurance Company
- Western Home Insurance Company
- Pioneer Specialty Insurance Company
- Umialik Insurance Company
- Arizona Automobile Insurance Company
- American Freedom Insurance Company
- Nevada General Insurance Company
This press release relates to Credit Ratings that have been published
on AM 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 AM Best’s Recent
Rating Activity web page. For additional information
regarding the use and limitations of Credit Rating opinions, please view Understanding
Best’s Credit Ratings. For information on the proper media
use of Best’s Credit Ratings and AM Best press releases, please view Guide
for Media – Proper Use of Best’s Credit Ratings and AM Best Rating
Action Press Releases.
AM Best is a global rating agency and information provider with a
unique focus on the insurance industry. Visit www.ambest.com
for more information.
Copyright © 2019 by A.M. Best Rating Services, Inc. and/or its
affiliates. ALL RIGHTS RESERVED.
Contacts
Kimberly Muccia
Senior Financial Analyst
+1
908 439 2200, ext. 5731
[email protected]
Christopher Sharkey
Manager, Public Relations
+1
908 439 2200, ext. 5159
[email protected]
Brian O’Larte
Director
+1 908 439 2200, ext.
5432
brian.o’[email protected]
Jim Peavy
Director, Public Relations
+1 908
439 2200, ext. 5644
[email protected]
