OLDWICK, N.J.--(BUSINESS WIRE)--A.M. Best has revised the outlook to positive from stable and affirmed the financial strength rating (FSR) of B++ (Good) and the issuer credit rating of “bbb+” of Michigan Professional Insurance Exchange (MPIE) (Grand Rapids, MI).
The revised outlook reflects MPIE’s strong risk-adjusted capitalization, long-term operating profitability, better-than-average underwriting leverage and its expertise in Michigan’s medical professional liability market. Additional supportive factors include favorable reserve development patterns, an expansion of enterprise risk management programs, operational results that compare well with peer companies, as well as MPIE’s plan to increase its geographic footprint in the state.
These positive rating factors are partially offset by the risks inherent in the company’s single state, single line profile. These include potential changes in the regulatory, legislative, economic and current tort environment. In addition, A.M. Best continues to monitor the company’s management of its subscriber savings accounts, which represent a significant percentage of policyholders’ surplus.
Positive rating actions may occur with continued strengthening of the balance sheet, ongoing underwriting and overall profitability, implementation of the expanded enterprise risk management program, proactive management of policyholders’ surplus and subscriber savings account balances, and successfully managing market diversification plans. Issues that could negatively impact the rating include a significant reduction in risk-adjusted capitalization or a trend of poor operating results.
The methodology used in determining these ratings is Best’s Credit Rating Methodology, which provides a comprehensive explanation of A.M. Best’s rating process and contains the different rating criteria employed in the rating process. Best’s Credit Rating Methodology can be found at www.ambest.com/ratings/methodology.
Key insurance criteria reports utilized:
- Evaluating U.S. Surplus Notes
- Risk Management and the Rating Process for Insurance Companies
- Understanding BCAR for Property/Casualty Insurers
This press release relates to rating(s) 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 visit A.M. Best’s Ratings & Criteria Center.
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