AM Best has revised the outlooks to negative from stable and affirmed the financial strength rating of A+ (superior) and the long-term issuer credit ratings of aa- for the members of Quincy Mutual Group.
The group includes the lead company, Quincy Mutual Fire Insurance Company, along with New England Mutual Insurance Company (NEMIC) and Patrons Oxford Insurance Company. Quincy Mutual and NEMIC are domiciled in Quincy, Mass., while Patrons is domiciled in Portland, Maine.
The group’s credit ratings reflect its balance sheet strength, which AM Best categorizes as strongest, as well as its strong operating performance, neutral business profile and appropriate enterprise risk management (ERM).
The negative outlooks reflect deterioration in underwriting performance in recent years that has resulted in underwriting and operating metrics falling to a level more in line with the private passenger standard auto and homeowners composite average. Recent years have been adversely impacted by catastrophe and non-catastrophe assumed reinsurance programs. While results historically have benefited from the assumed programs, recent expansion and catastrophes have diminished the group’s overall key performance metrics.
The group’s strongest balance sheet strength is supported by its risk-adjusted capitalization being at the strongest level, as measured by Best’s Capital Adequacy Ratio (BCAR), favorable loss reserve development, strategic reduction in common stock leverage and underwriting leverage that is considerably below the composite.
The group’s neutral business profile reflects historically profitable diversification achieved through the direct and assumed channels, as well as predictive analytics embedded within the decision-making and pricing processes. AM Best considers ERM as appropriate through utilization of a sophisticated capital model to help guide risk tolerances.
Source: AM Best
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