OLDWICK, N.J.--(BUSINESS WIRE)--A.M. Best has upgraded the Financial Strength Ratings (FSR) to A (Excellent) from A- (Excellent) and the Long-Term Issuer Credit Ratings (Long-Term ICR) to “a” from “a-” of Medical Mutual Liability Insurance Society of Maryland and its wholly owned subsidiary, Professionals Advocate Insurance Company. These companies are collectively referred to as Medical Mutual Group (MD) (the group).The outlook of the group’s Credit Ratings (ratings) has been revised to stable from positive. Both companies are domiciled in Hunt Valley, MD.
The rating upgrades reflect the group’s continued strong operating performance, which has allowed them to strengthen risk-adjusted capitalization while concurrently declaring significant dividends. The ratings further acknowledge the group’s enterprise risk management program, overall favorable reserve development, and A.M. Best’s expectation that the companies’ favorable operating results will remain strong and maintain excellent risk-adjusted capitalization.
Offsetting rating factors include the inherent challenges associated with the medical professional liability insurance sector as they relate to regulation, competition, legislative reform and loss cost trends. These risks are evident by variations in underwriting results over the recent five-year period due to a decrease in premium writings, loss frequency and severity trends, and claim payments. Management has mitigated these factors through various techniques, which have contributed to improved financial performance.
Negative rating actions could occur following poor underwriting results through claim severity or frequency issues, adverse trends in reserve development, a shift in market dynamics (increased competition, consolidation of medical practices, emphasis on price sensitivity), or significant changes in tort reform.
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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