OLDWICK, N.J.--(BUSINESS WIRE)--A.M. Best has upgraded the Financial Strength Rating (FSR) to A (Excellent) from A- (Excellent) and the Long-Term Issuer Credit Rating (Long-Term ICR) to “a” from “a-” of UMIA Insurance, Inc. (UMIA) (Beaverton, OR). In addition, A.M. Best has affirmed the FSR of A (Excellent) and the Long-Term ICRs of “a” of MMIC Insurance, Inc. (MMIC) (Minneapolis, MN) and Arkansas Mutual Insurance Company (Little Rock, AR). These companies are collectively referred to as MMIC Insurance Group (the group). The outlook of these Credit Ratings (ratings) is stable.
The upgrade of UMIA’s ratings reflects the implicit support provided by its parent company, MMIC, following the management’s integration efforts since its acquisition of UMIA in 2013. UMIA supports the group’s growth and business strategy, obtains synergies with MMIC through shared functions and management, provides the group with geographic diversification, and is a material component of the group’s overall financial composition and earnings.
The affirmation of the group’s ratings reflect its strong balance sheet, favorable operating performance, and demonstrated expertise and specialization within its marketplace as one of the leading provider of medical profession liability (MPL) insurance in the Midwest. Partially offsetting these positive rating factors are the inherent risks associated with being concentrated in a single line of business and the changing market dynamics within the MPL segment, which has contributed to declining direct premium written each of the past five years. In addition, the group’s common stock leverage exceeds industry averages and subjects surplus to greater risk of volatility.
Positive rating action could result if the group’s operating and underwriting performance remain favorable while maintaining its market leadership position in its key states, as the group manages through the current challenging market cycle.
Negative rating action could result from negative trends in claim frequency or severity that materially impair underwriting profitability and lead to deteriorating operating trends or cause weakening in risk-adjusted capitalization.
This press release relates to Credit Ratings 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. For additional information regarding the use and limitations of Credit Rating opinions, please view Understanding Best’s Credit Ratings.
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