A.M. Best Co. announced it has downgraded the financial strength rating (FSR) to B++ (Good) from A- (Excellent) and issuer credit rating (ICR) to “bbb+” from “a-” of Michigan Millers Mutual Insurance Company (Michigan Millers) of Lansing, Mich.
The outlook for the FSR has been revised to stable from negative, while the outlook for the ICR is negative.
Best said the rating actions reflect Michigan Millers’ weak underwriting results, the drop in its risk-adjusted capitalization since 2006 and the execution risk associated with management’s various initiatives to return the company to a profitable footing.
However, Best noted that Michigan Millers’ risk-adjusted capitalization remains strong and is more than supportive of the current ratings. Furthermore, the company’s historically profitable operating performance, niche market expertise and management’s actions to improve future underwriting results are all viewed as positive attributes for the ratings.
The company’s results remain exposed to both weather-related losses and the weak economic conditions in Michigan. Best said Michigan Millers’ management is committed to returning the company to underwriting profitability through tighter pricing and underwriting strategies with a focus on more profitable business segments.
Michigan Millers’ writes various property/casualty insurance products mainly across the Midwest, New York and (to a lesser degree) the Southwest. Michigan Millers’ operations are organized into two segments: general business and agribusiness, with general business including both commercial and personal lines.
Source: A.M. Best, www.ambest.com/ratings.