OLDWICK, N.J.--(BUSINESS WIRE)--AM Best has downgraded the Financial Strength Rating to B (Fair) from B+ (Good) and the Long-Term Issuer Credit Rating to “bb+” (Fair) from “bbb-” (Good) of Associated Mutual Insurance Cooperative (Associated Mutual) (Woodridge, NY). The outlook of these Credit Ratings (ratings) is stable.
The ratings reflect Associated Mutual’s balance sheet strength, which AM Best assesses as adequate, as well as its marginal operating performance, limited business profile and marginal enterprise risk management.
The rating downgrades consider a material change in Associated Mutual’s reinsurance program through mid-year 2023 that has notably impacted risk-adjusted capitalization levels. The company’s aggregate excess of loss contract, which previously covered 100% of losses above the attachment point, is now subject to a $20 million top limit, protecting up to its 1-in-100 year modeled event. As such, results are exposed to potentially severe events, particularly given Associated Mutual’s high concentration of business in the downstate New York region. The balance sheet strength assessment was lowered to adequate from strong to reflect this inherent risk.
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