OLDWICK, N.J.--(BUSINESS WIRE)--AM Best has affirmed the Financial Strength Rating (FSR) of A+ (Superior) and the Long-Term Issuer Credit Rating (Long-Term ICR) of “aa” (Superior) of Acuity, A Mutual Insurance Company (Acuity) (Sheboygan, WI). AM Best has revised the outlook to negative from stable for the Long-Term ICR, while the outlook of the FSR is stable.
The Credit Ratings (ratings) reflect Acuity’s balance sheet strength, which AM Best assesses at the strongest level, as well as its strong operating performance, favorable business profile and very strong enterprise risk management.
The negative outlook on Acuity’s Long-Term ICR reflects pressure on the insurer’s operating performance, following weakened results in 2022, primarily due to weather-related losses and declining investment performance, as well as the inflationary effects on the market. While Acuity’s operating results previously have outperformed its commercial casualty composite, 2022 proved to be especially challenging, given the investment market volatility and outsized weather catastrophe losses in Acuity’s mature states of Wisconsin, Minnesota, South Dakota and Iowa.
Acuity has implemented detailed strategies to restore underwriting profitability, which include action items such as rate changes, inflation guard pricing adjustments and geographic expansion to diversify its territorial footprint.
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