OLDWICK, N.J.--(BUSINESS WIRE)--A.M. Best has upgraded the Financial Strength Rating to B++ (Good) from B+ (Good) and the Long-Term Issuer Credit Rating to “bbb” from “bbb-” of CAMICO Mutual Insurance Company (CAMICO) (San Mateo, CA). The outlook of these Credit Ratings (ratings) has been revised to stable from positive.
The ratings reflect CAMICO’s balance sheet strength, which A.M. Best categorizes as very strong, as well as its marginal operating performance, limited business profile and appropriate enterprise risk management.
The rating upgrades reflect the continued improvement in the company’s underwriting performance in recent years due to corrective actions taken by management. Management’s improved risk management practices also include the company’s improved customer profile, reduced limits profile, reinsurance changes, claims management changes and the company’s ability to reduce operating expenses via ceding commission. While management has made progress over the years, these positive attributes are offset partially by the company’s modest operating margins and returns, the adverse loss reserve development on prior accident years and the inherent market risks associated with being a mono-line professional liability insurer for accountants. In addition, CAMICO has had to contribute capital to its wholly owned subsidiary, CAMICO Services, Inc., in recent years. Additional capital may be required if the subsidiary remains unprofitable; however, expense reduction initiatives have been put into place to return this agency to profitability, which management expects to achieve in 2018.
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