AM Best Downgrades Credit Ratings of Inland Mutual Insurance Company

OLDWICK, N.J.--(BUSINESS WIRE)--AM Best has downgraded the Financial Strength Rating to B++ (Good) from A- (Excellent) and the Long-Term Issuer Credit Rating (Long-Term ICR) to “bbb+” (Good) from “a-” (Excellent) of Inland Mutual Insurance Company (IMIC) (Huntington, WV). The outlooks of these Credit Ratings (ratings) have been revised to stable from negative.

The ratings reflect IMIC’s balance sheet strength, which AM Best assesses as very strong, as well as its adequate operating performance, limited business profile and appropriate enterprise risk management.

The rating downgrades reflect unfavorable operating performance trends in recent years from a declining premium base, which has tempered surplus growth and had an adverse impact on the favorable characteristics of capital permanency considered appropriate for the balance sheet strength baseline ICR assessment.

IMIC’s balance sheet strength assessment remains very strong and is supported by risk-adjusted capitalization at the strongest level, as measured by Best’s Capital Adequacy Ratio (BCAR), partially offset by limited financial flexibility and scale of operations.

IMIC’s adequate operating performance assessment is driven largely by key metrics of total operating earnings such as pre-tax return on revenue and operating ratio, which have remained close to the personal property lines composite over the longer term despite the deterioration in recent years.

IMIC’s limited business profile assessment is driven largely by its geographic concentration in a few states within the Appalachian region of the United States, which exposes results to frequent and severe weather-related events, as well as potential judicial, economic, competitive and regulatory challenges.

This press release relates to Credit Ratings that have been published on AM 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 AM Best’s Recent Rating Activity web page. For additional information regarding the use and limitations of Credit Rating opinions, please view Guide to Best’s Credit Ratings. For information on the proper media use of Best’s Credit Ratings and AM Best press releases, please view Guide for Media - Proper Use of Best’s Credit Ratings and AM Best Rating Action Press Releases.

AM Best is a global credit rating agency, news publisher and data analytics provider specializing in the insurance industry. Headquartered in the United States, the company does business in over 100 countries with regional offices in London, Amsterdam, Dubai, Hong Kong, Singapore and Mexico City. For more information, visit www.ambest.com.

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