AM Best Revises Issuer Credit Rating Outlook to Stable for Preferred Mutual Insurance Company

OLDWICK, N.J.--(BUSINESS WIRE)--AM Best has revised the outlook to stable from negative 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+” (Excellent) of Preferred Mutual Insurance Company (Preferred Mutual) (New Berlin, NY). The outlook of the FSR is stable.

The Credit Ratings (ratings) reflect Preferred Mutual’s balance sheet strength, which AM Best assesses as strongest, as well as its adequate operating performance, neutral business profile and appropriate enterprise risk management.

The revised Long-Term ICR outlook to stable is a result of the recent improvement in the company’s balance sheet strength, including stabilizing loss reserving trends due to consecutive years of favorable reserve development and surplus growth. AM Best’s balance sheet strength assessment of strongest is supported by Preferred Mutual’s risk-adjusted capitalization also being at the strongest level, as measured by Best’s Capital Adequacy Ratio (BCAR), along with the company’s relatively conservative investment portfolio, solid liquidity measures and comprehensive reinsurance program. Preferred Mutual also had generally positive growth in policyholder’s surplus over the long term, which is partially offset by some limitation in its financial flexibility.

Preferred Mutual’s adequate operating performance is supported by solid underwriting results and consistent investment earnings, with the past two years reflecting an improvement in pure loss ratio trends.

Preferred Mutual’s neutral business profile assessment is driven largely by its solid regional niche market role with a broad product offering.

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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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