OLDWICK, N.J.--(BUSINESS WIRE)--A.M. Best has revised the outlooks to negative from stable and affirmed the Financial Strength Rating of B+ (Good) and the Long-Term Issuer Credit Rating of “bbb-” of State Mutual Insurance Company (State Mutual) (Rome, GA).
The revised outlooks reflect a decline in surplus as a result of operating losses and capital losses from investments in 2016. A surplus relief reinsurance agreement in 2017 improved State Mutual’s surplus position from year-end 2016. However, operating losses due to continued high expenses, reduced premium as a result of the reinsurance transaction and continued capital losses have partially mitigated this increase through the third quarter. In addition, A.M. Best believes that the company’s most recent 2017 financial plans are unlikely to be achieved based on actual nine-month results.
State Mutual continues to hold higher risk assets in its investment portfolio that reduce liquidity and could result in future capital losses. A.M. Best will continue to monitor the company’s operating results and capital position, as it attempts to execute on its plans to grow its individual accident and health business.
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