Ratings Recap: DHC Group, Physicians (Wisconsin), Midwest Family Mutual, Western Mutual

December 6, 2007

A.M. Best Co. has assigned issuer credit ratings (ICR) of “bb-” and affirmed the financial strength rating (FSR) of ‘B-’ (Fair) of Long Beach Calif.-based DHC Group and its members. The outlook for both of the ratings is stable. Best noted: “Ultimate financial control of DHC and its members rests with Covanta Holding Corporation, a publicly held waste disposal, energy services and specialty insurance holding company. The ratings reflect DHC Group’s risk-adjusted capitalization and historically unfavorable operating results. Offsetting these positive rating factors are management’s actions to reduce premium writings in its historically unprofitable lines of business and states, as well as strategic efforts to become a specialty line automobile and surety writer. In addition, operational changes designed to improve earnings have been implemented, resulting in improved loss experience.”

A.M. Best Co. has assigned an issuer credit rating of “a-” and affirmed the financial strength rating (FSR) of ‘A-’ (Excellent) of Physicians Insurance Company of Wisconsin, Inc. In addition Best has removed the FSR from under review with negative implications, and both ratings have been assigned a stable outlook. “These rating actions follow regulatory approval and subsequent implementation of a stop-loss reinsurance agreement between PIC Wisconsin and The Medical Assurance Company Inc. (TMAC), both of which are subsidiaries of ProAssurance Corporation (both of Birmingham, Ala.),”Best explained. “This agreement, which covers accident year 2006 and prior claims, successfully addresses A.M. Best’ s concern over PIC Wisconsin’ s risk-adjusted capital position, which previously was not supportive of the FSR.”

A.M. Best Co. has affirmed the financial strength rating of ‘A-’ (Excellent) and the issuer credit rating of “a-” of Midwest Family Mutual Insurance Company of Plymouth, Minn., and has revised its outlook on the ratings to positive from stable. “The ratings reflect Midwest Family Mutual’s favorable operating profitability, which is derived from the company’s increased geographical and product diversification, expense reduction initiatives, long-standing agency relationships and firm market conditions,” said Best.

A.M. Best Co. has upgraded the financial strength rating (FSR) to ‘A’ (Excellent) from ‘A-’ (Excellent) and assigned issuer credit ratings (ICR) of “a” to Western Mutual Insurance Group of Agoura Hills, Calif. The outlook for all of the Group’s ratings is stable. “The rating upgrade is based on Western Mutual’s improved risk-adjusted capitalization, consistently strong operating performance, extensive local market knowledge and enhanced risk management program,” Best explained.

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