OLDWICK, N.J.--(BUSINESS WIRE)--A.M. Best has downgraded the Financial Strength Rating (FSR) to A- (Excellent) from A (Excellent) and the Long-Term Issuer Credit Ratings (Long-Term ICR) to “a-” from “a” of the members of Motorist Insurance Pool (Motorists). The outlook of these Credit Ratings (ratings) is revised to stable from negative. Concurrently, A.M. Best has removed from under review with positive implications and affirmed the FSR of A- (Excellent) and the Long-Term ICRs of “a-” of the members of BrickStreet Mutual Insurance Group (BrickStreet). The outlook assigned to these ratings is stable.
The rating downgrades of Motorists reflect the company’s underwriting performance over the past several years, which falls short of performance expectations at the previous rating level. Thus far in 2017, unfavorable underwriting results have been amplified by adverse development being reported in auto lines and several points of catastrophe losses. Motorists maintains strong risk-adjusted capitalization and a comprehensive reinsurance program, which also help to mitigate concerns as underwriting performance is addressed through several ongoing initiatives.
The above rating actions also reflect regulatory approvals received from various states granting Motorists and BrickStreet affiliation through a joint venture that was announced on Oct. 28, 2016. Senior management of both companies has merged, allowing them to partner financially and operationally. While execution risk is present, this affiliation does provide Motorists and BrickStreet improved risk diversification and expanded agency distribution, while maintaining their individual brands. Given BrickStreet’s profitable underwriting and operating performance and its prudent loss reserving standards along with Motorists’ focused operating strategy, extensive product knowledge, diversified product offerings and long-standing regional market presence, this affiliation may ultimately yield significant benefits. A.M. Best will closely monitor the developments of the affiliation to discern if these potential benefits are being realized.
The downgrade of the FSR to A- (Excellent) from A (Excellent) and the Long-Term ICRs to “a-” from “a”, with a stable outlook, applies to the following property/casualty Motorists’ members: Consumers Insurance USA, Inc. (Murfreesboro,TN), Iowa American Insurance Company (De Witt, IO), Iowa Mutual Insurance Company (De Witt, IO), MICO Insurance Company (Columbus, OH), Motorists Commercial Mutual Insurance Company (Columbus, OH), Motorists Mutual Insurance Company (Columbus, OH), Phenix Mutual Fire Insurance Company (Concord, NH) and Wilson Mutual Insurance Company (Sheboygan, WI).
The ratings have been removed from under review with positive implications and affirmed at an FSR of A- (Excellent) and Long-Term ICRs of “a-”, with an assigned stable outlook, of the following BrickStreet members: BrickStreet Mutual Insurance Company (Charleston, WV), NorthStone Insurance Company (Harrisburg, PA), SummitPoint Insurance Company (Charleston, WV), PinnaclePoint Insurance Company (Charleston, WV) and HM Casualty Insurance Company (Harrisburg, PA).
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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