OLDWICK, N.J.--(BUSINESS WIRE)--AM Best has revised the outlooks to stable from positive and affirmed the Financial Strength Rating of A- (Excellent) and the Long-Term Issuer Credit Rating of a- (Excellent) of Wayne Cooperative Insurance Company (Wayne Cooperative) (Clyde, NY).
The Credit Ratings (ratings) reflect Wayne Cooperative’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 (ERM).
The revision of the outlooks to stable reflects increased volatility in Wayne Cooperative’s operating performance in 2021 and 2022 and continuing through the third quarter of 2023. While over the long term, the company has proven effective at managing its property-exposed portfolio, headwinds presented in the market including inflation and reinsurance market conditions continue to challenge results. Although profitability is expected to remain solid marked by key performance indicators consistent with prior years, operating performance metrics are better aligned with companies assessed at the adequate level. Prospective results are expected to benefit from management’s tightened underwriting standards, weather mitigation strategies and diversification strategies.
Wayne Cooperative’s balance sheet strength is supported by its risk-adjusted capitalization maintained at the strongest level, as measured by Best’s Capital Adequacy Ratio (BCAR), conservative investment portfolio with solid liquidity measures and comprehensive reinsurance program. The business profile reflects the company’s geographic concentration in Upstate New York, which exposes results to localized weather events, as well as judicial and regulatory challenges. AM Best considers the ERM program appropriate for the company’s size and scale of operations.
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