OLDWICK, N.J.--(BUSINESS WIRE)--AM Best has revised the outlook to positive from stable for the Long-Term Issuer Credit Rating (Long-Term ICR) and affirmed the Financial Strength Rating (FSR) of A (Excellent) and the Long-Term ICR of “a” of Lawyers Mutual Liability Insurance Company of North Carolina (LML) (Cary, NC). The outlook of the FSR remains stable.
These Credit Ratings (ratings) reflect LML’s balance sheet strength, which AM Best categorizes as strongest, as well as its adequate operating performance, neutral business profile and appropriate enterprise risk management.
The positive outlook for the Long-Term ICR is based on LML’s improved operating performance in recent years, driven primarily by favorable loss experience, which has led to strong surplus growth. The favorable earnings trend is mainly attributed to improved underwriting, stricter underwriting and claims handling and favorable reserve development. In addition, LML’s return on invested assets has been stable and compares favorably with those of the composite averages.
The ratings also recognize LML’s strongest level of risk-adjusted capitalization, strong liquidity, conservative investment portfolio and comprehensive reinsurance program that protects policyholder surplus from volatility in results. In addition, reserves have developed favorably and continued to decline in recent years as a result of the company’s focus on closing claims quickly and lower claim frequency. LML has long-standing expertise in the North Carolina legal professional liability sector; however, geographic and product concentration subjects it to a higher degree of risk from fluctuations in the state’s economic conditions.
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