AM Best downgrades credit ratings of associated mutual insurance cooperative


OLDWICK, NJ–(BUSINESS WIRE)–AM Best downgraded Associated Mutual Insurance’s financial strength rating from B+ (good) to B++ (good) and the issuer’s long-term credit rating to “bbb-” (good) from “bbb” (good) Cooperative (Associated Mutual) (Woodridge, NY). The outlook for these credit ratings (ratings) has been revised from negative to stable.

The ratings reflect the strength of Associated Mutual’s balance sheet, which AM Best rates as strong, as well as its marginal operating performance, limited business profile and marginal enterprise risk management (ERM).

The rating downgrades reflect the evolution of Associated Mutual’s risk management capabilities, which have not been aligned with its risk profile, particularly with respect to reserve management and performance. global operations. Although ERM initiatives continue to be implemented in business operations, the balance sheet remains under pressure from a history of unfavorable reserve development, high reserve leverage relative to its policyholder surplus and continued unfavorable operating performance. The inability to effectively manage and control these pressure points over time calls into question the overall effectiveness of the ERM program. The revised outlook from stable to negative reflects the company’s stronger risk-adjusted capitalization, as measured by Best’s capital adequacy ratio (BCAR), which allows the development of ERM stocks to fully assess their effectiveness at improve these pressure points.

This press release relates to credit ratings that have been published on AM Best’s website. For everyone rating information relating to the release and relevant disclosures, including details of the office responsible for issuing each of the individual ratings referenced in this release, please see AM Best’s Recent Assessment Activity Web page. For more information on the use and limitations of credit rating opinions, please see Best Credit Score Guide. For more information on the proper use of Best’s Credit Ratings, Best’s Performance Ratings, Best’s Preliminary Credit Ratings, and AM Best’s press releases, please see Guide to Proper Use of Best’s Ratings and Reviews.

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 more than 100 countries with regional offices in London, Amsterdam, Dubai, Hong Kong, Singapore and Mexico City. For more information, visit www.ambest.com.

Copyright © 2022 by AM Best Rating Services, Inc. and/or its affiliates. ALL RIGHTS RESERVED.

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