AM Best Revises Outlooks to Positive for CAMICO Mutual Insurance Company

OLDWICK, N.J.--(BUSINESS WIRE)--AM Best has revised the outlooks to positive from stable and affirmed the Financial Strength Rating of B++ (Good) and the Long-Term Issuer Credit Rating of “bbb+” (Good) of CAMICO Mutual Insurance Company (CAMICO) (San Mateo, CA).

The Credit Ratings (ratings) reflect CAMICO’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 positive outlooks reflect AM Best’s expectation for continued strengthening of CAMICO’s balance sheet over the intermediate term with solid earnings supporting organic surplus growth and an improving trend in the company’s quality of capital, with surplus note principal repayments of $1 million in each of the two most recent years, as well as AM Best’s expectation for further improvement in the years ahead. CAMICO maintains risk-adjusted capitalization, as measured by Best’s Capital Adequacy Ratio (BCAR), at the strongest level with and without equity credit for its outstanding surplus note obligation. In addition, the company’s investment portfolio is highly conservative and loss reserve development trends have been favorable in recent years. Further, underwriting leverage metrics are low and an appropriate reinsurance program is in place. These favorable attributes are offset partially by increased interest expense as a result of the rise in interest rates, due to the outstanding surplus note bearing interest at a variable rate.

Positive rating action could occur following sustained strengthening of CAMICO’s balance sheet through organic surplus growth from profitable operations while the company continues to pay down its surplus note obligations incrementally and maintains favorable loss reserve development trends. Negative rating action may occur if the company’s risk-adjusted capitalization should substantially decline.

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 use of Best’s Credit Ratings, Best’s Performance Assessments, Best’s Preliminary Credit Assessments and AM Best press releases, please view Guide to Proper Use of Best’s Ratings & Assessments.

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.

Copyright © 2023 by A.M. Best Rating Services, Inc. and/or its affiliates. ALL RIGHTS RESERVED.