A.M. Best Revises Outlooks to Negative for Wisconsin Municipal Mutual Insurance Company

OLDWICK, N.J.--()--A.M. Best has revised the outlooks to negative from stable and affirmed the Financial Strength Rating of A- (Excellent) and the Long-Term Issuer Credit Rating of “a-” for Wisconsin Municipal Mutual Insurance Company (WMMIC) (Madison, WI).

The ratings reflect WMMIC’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 (ERM).

These positive rating factors are derived from the company’s modest underwriting leverage, adequate operating performance, long-standing relationships with its municipal and county member/insureds and emphasis on loss control efforts as part of its overall ERM. Other positive factors supporting the ratings include WMMIC’s conservative investment portfolio comprised of highly rated bonds and overall operating strategy.

The negative outlooks reflect reported operating losses and adverse trend in underwriting results over the past three years resulting in declines in policyholder surplus. The operating losses were due to unfavorable underwriting results driven by adverse loss reserve development on several large liability claims. Nonetheless, a prudent reinsurance program and an emphasis on loss control have mitigated the frequency and severity of these exposures. While WMMIC has successfully attracted and retained its member/insureds through profit sharing via policyholder dividends, it has led to negative return measures and significantly elevated combined and operating ratios. In the latest five-year period, policyholder dividends have averaged approximately 53 points to the company’s combined ratio. Further, WMMIC has a limited business profile due to its limited pool of potential policyholders, product offerings and geography.

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.

A.M. Best is the world’s oldest and most authoritative insurance rating and information source. For more information, visit www.ambest.com.

Copyright © 2018 by A.M. Best Rating Services, Inc. and/or its affiliates. ALL RIGHTS RESERVED.

Contacts

A.M. Best
Kevin Dorsey, +1-908-439-2200, ext. 5401
Senior Financial Analyst
kevin.dorsey@ambest.com
or
Joseph Burtone, +1-908-439-2200, ext. 5125
Director
joseph.burtone@ambest.com
or
Christopher Sharkey, +1-908-439-2200, ext. 5159
Manager, Public Relations
christopher.sharkey@ambest.com
or
Jim Peavy, +1-908-439-2200, ext. 5644
Director, Public Relations
james.peavy@ambest.com

Contacts

A.M. Best
Kevin Dorsey, +1-908-439-2200, ext. 5401
Senior Financial Analyst
kevin.dorsey@ambest.com
or
Joseph Burtone, +1-908-439-2200, ext. 5125
Director
joseph.burtone@ambest.com
or
Christopher Sharkey, +1-908-439-2200, ext. 5159
Manager, Public Relations
christopher.sharkey@ambest.com
or
Jim Peavy, +1-908-439-2200, ext. 5644
Director, Public Relations
james.peavy@ambest.com