AM Best Revises Outlooks to Negative for Mutual Benefit Group Members

OLDWICK, N.J.--(BUSINESS WIRE)--AM Best has revised the outlooks to negative from stable and affirmed the Financial Strength Rating of A- (Excellent) and the Long-Term Issuer Credit Ratings (Long-Term ICRs) of “a-” (Excellent) of Mutual Benefit Insurance Company and Select Risk Insurance Company. These companies are members of Mutual Benefit Group (Mutual Benefit) and are domiciled in Huntingdon, PA.

The Credit Ratings (ratings) reflect Mutual Benefit’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 revised outlooks to negative from stable of the Long-Term ICRs consider a deviation in Mutual Benefit’s operating results in more recent years. Deterioration of operating performance resulting from increased frequency of losses with the majority of losses being retained by the group as they did not breach retention levels. Additionally, the expense ratio has been elevated due to one-time expenses from technology write-offs of an old system and employee severance. Due to the aforementioned occurrences, results in the last two years have deviated from projections with elevated losses and minimal loss recoveries. While results showed improvements to a degree in 2023, loss frequency and expense related items still impacted operating results.

Mutual Benefit’s management team has implemented initiatives to help mitigate volatility, which includes significant rate action, specific exclusions and continued refinement of underwriting standards. Property inspections and increased deductibles are expected to help mitigate volatility as well. Mutual Benefit currently has a new technology initiative in place to improve its technology, enable smoother product development and create a new agency interface to be able to integrate pricing and other tools. AM Best expects these actions to help Mutual Benefit improve its current level of operating performance. Results through 2024 have shown improvements, but absent a trend of stabilized and sustainable improvements in operating metrics, the ratings are likely to be downgraded.

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.

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