OLDWICK, N.J.--(BUSINESS WIRE)--A.M. Best has revised the outlook to positive from stable for the Long-Term Issuer Credit Rating (Long-Term ICR) and affirmed the Financial Strength Rating (FSR) of A (Excellent) and the Long-Term ICR of “a” of Texas Mutual Insurance Company (Texas Mutual). The outlook of the FSR remains stable.
The ratings reflect Texas Mutual’s balance sheet strength, which A.M. Best categorizes as strongest, as well as its strong operating performance, limited business profile and appropriate enterprise risk management.
The revised Long-Term ICR outlook reflects Texas Mutual’s strong operating performance, which has helped generate a five-year compound annual growth rate in surplus of 13.5% through 2016 while supporting policyholder dividends that have averaged over 20% of net premiums earned over that period. A.M. Best expects the company’s balance sheet strength to remain in the strongest category with leverage ratios over the past five years having moved to increasingly conservative levels. In addition, although Texas Mutual is limited to writing workers’ compensation in Texas, its business profile also reflects its importance in providing coverage in the state as evidenced by its dominant 40% market share. Texas Mutual maintains an appropriate enterprise risk management program that reflects annual risk assessments, outlines risk appetite and tolerances, as well as mitigation strategies.
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