OLDWICK, N.J.--(BUSINESS WIRE)--A.M. Best has revised the outlooks to stable from positive and affirmed the Financial Strength Rating of A- (Excellent) and the Long-Term Issuer Credit Rating of “a-” of Center Mutual Insurance Company (Rugby, ND)
The ratings reflect Center Mutual’s balance sheet strength, which A.M. Best categorizes as very strong, as well as its adequate operating performance, limited business profile and appropriate enterprise risk management.
While Center Mutual posted positive operating results in 2017, the outlook revisions are due primarily to volatility in the company’s operating performance over an extended period. Although Center Mutual increased surplus in 2017, further supporting its overall balance sheet strength assessment of very strong, A.M. Best believes that operating results, which in most years are favorable, have varied widely, which is unlikely to result in a change in the adequate operating performance assessment over the intermediate term. Accordingly, the outlooks have been revised to stable.
The affirmation of the ratings reflects Center Mutual’s ability to improve overall risk-adjusted capitalization and maintain underwriting leverage ratios despite periods of rapid growth and challenging weather conditions during the latest five-year period.
Most of the company’s business is produced in North Dakota, which leaves it exposed to frequent and severe weather-related events, as well as judicial, regulatory and economic changes.
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