A.M. Best Co. has assigned a financial strength rating of B+ (Good) and an issuer credit rating of “bbb-” to Ellington Mutual Insurance Company (Ellington) of Hortonville, Wis. The outlook assigned to both ratings is stable.
The ratings reflect Ellington’s strong risk-adjusted capitalization, positive operating performance and long standing market presence in Wisconsin, according to Best.
Ellington’s strong capital position is based on its relatively low underwriting leverage, favorable liquidity and several years of positive operating income.
Operating income, over the past five years, was derived mainly from steady investment income generated by the company’s relatively conservative investment portfolio.
Partially offsetting these positive rating factors is Ellington’s volatile underwriting performance and geographic concentration of risks. As a single-state property/casualty writer conducting business exclusively in Wisconsin, its underwriting performance is susceptible to frequent and severe weather-related events. In addition, the company maintains an elevated expense position, mainly driven by commission costs and technology enhancements.
Source: A.M. Best, www.ambest.com/ratings.
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