A.M. Best Revises Outlooks to Stable for Wisconsin Municipal Mutual Insurance Company

OLDWICK, N.J.--()--A.M. Best has revised the outlooks to stable from positive and affirmed the Financial Strength Rating of A- (Excellent) and the Long-Term Issuer Credit Rating of “a-” of Wisconsin Municipal Mutual Insurance Company (WMMIC) (Madison, WI).

The revised outlooks reflect the decline in policyholders’ surplus and risk-adjusted capitalization due to recent unfavorable trends in underwriting and operating results. The decline was attributed to several losses from civil rights claims settled within the federal court system that were not subject to state caps on liability losses which generated high severity losses. However, prudent reinsurance programs and an emphasis on loss control initiatives have mitigated the severity of these losses.

While the company has successfully attracted and retained insureds through profit sharing via policyholder dividends, such annual dividends have also contributed to the recent decline in policyholders’ surplus and risk-adjusted capitalization, and led to overall variable return measures and elevated combined ratios.

Nevertheless, the excellent Credit Ratings (ratings) and stable outlooks reflect WMMIC’s very strong risk-adjusted capitalization and strong market niche insuring local city and county municipalities in Wisconsin. WMMIC’s overall risk-adjusted capitalization is very strong as its underwriting leverage is significantly below the commercial casualty composite.

Additionally, the ratings reflect WMMIC’s solid relationships with its insureds, commitment to loss control initiatives and conservative operating and investment strategy. WMMIC’s operating results, in the earlier years of the recent five-year period, benefited from tort caps that limit indemnity losses at the state level. Furthermore, management carefully monitors and adjusts its policyholder’s self-insured retentions, which helps WMMIC achieve desired operating results. The ratings also acknowledge the company’s tax-exempt status and the benefit of tort caps in Wisconsin, which limit indemnity losses for general and auto liability.

Partially offsetting these strengths are the company’s somewhat limited business profile with respect to additional product offerings and the growth potential of its customer base.

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. For information on the proper media use of Best’s Credit Ratings and A.M. Best press releases, please view Guide for Media - Proper Use of Best’s Credit Ratings and A.M. Best Rating Action Press Releases.

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Contacts

A.M. Best
Kevin Dorsey, +1-908-439-2200, ext. 5401
Senior Financial Analyst
kevin.dorsey@ambest.com
or
Joe Burtone, +1-908-439-2200, ext. 5125
Director
joseph.burtone@ambest.com
or
Christopher Sharkey, +1-908-439-2200, ext. 5159
Manager, Public Relations
christopher.sharkey@ambest.com
or
Jim Peavy, +1-908-439-2200, ext. 5644
Director, Public Relations
james.peavy@ambest.com

Contacts

A.M. Best
Kevin Dorsey, +1-908-439-2200, ext. 5401
Senior Financial Analyst
kevin.dorsey@ambest.com
or
Joe Burtone, +1-908-439-2200, ext. 5125
Director
joseph.burtone@ambest.com
or
Christopher Sharkey, +1-908-439-2200, ext. 5159
Manager, Public Relations
christopher.sharkey@ambest.com
or
Jim Peavy, +1-908-439-2200, ext. 5644
Director, Public Relations
james.peavy@ambest.com