OLDWICK, N.J.--(BUSINESS WIRE)--A.M. Best has revised the outlooks to positive from stable and affirmed the Financial Strength Rating of A- (Excellent) and the Long-Term Issuer Credit Rating (Long-Term ICR) of “a-” of Southern Mutual Church Insurance Company (SMCIC) (Columbia, SC).
The ratings reflect SMCIC’s balance sheet strength, which A.M. Best categorizes as very strong, as well as its strong operating performance, limited business profile and appropriate enterprise risk management.
The revision in the outlooks reflects the favorable trend in SMCIC’s underwriting and overall operating performance in recent years, which continues to strengthen its balance sheet. The company’s better than average earnings are attributable to actions taken by management which include rate increases, deductibles and various loss control initiatives, among others. Risk-adjusted capitalization, as measured by Best’s Capital Adequacy Ratio (BCAR), has improved in recent years through strong surplus growth and reduced exposure to catastrophe losses through restructuring of the reinsurance program. The business profile is limited, primarily due to a concentration of property risk in the Southeast United States.
The rating affirmations capture SMCIC’s very strong risk-adjusted capital levels, the management team’s long-term experience in their niche and focus on underwriting fundamentals. These factors are offset partially by the current competitive conditions within the commercial property market in which SMCIC operates.
The ratings may be considered for positive movement following continued balance sheet strengthening through favorable operating results over a period of time. Negative credit rating action may occur if SMCIC’s underwriting results significantly worsen as a result of increased storm losses or elevated expenses, or if there is a deterioration in risk-adjusted capitalization.
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