A.M. Best Withdraws Ratings of 2 Midwest Mutual Insurers

A.M. Best Co. announced that, in separate actions, it has withdrawn the ratings of two Midwest-based mutual insurance companies at the request of those companies.

Best affirmed the financial strength rating (FSR) of C++ (Marginal) and issuer credit rating (ICR) of “b” of Fond du Lac, Wis.-headquartered Wisconsin American Mutual Insurance Company (Wisconsin American Mutual). The outlook for both ratings is stable. Concurrently, the ratings agency withdrew the ratings at the company’s request and assigned a category NR-4 to the FSR and an “nr” to the ICR.

Additionally, Best affirmed the financial strength rating (FSR) of A- (Excellent) and issuer credit rating (ICR) of “a-” of Lutheran Mutual Fire Insurance Company of Wheaton, Ill. The outlook for both ratings is stable. Best also withdrew the ratings at the company’s request and assigned a category NR-4 to the FSR and an “nr” to the ICR.

Wisconsin American Mutual’s ratings reflect its weak underwriting results due to the impact of severe weather-related and significant fire losses, Best said, as well as its significant dependence on reinsurance and adverse loss reserve development that occurred over several years.

Offsetting these rating factors is management’s strategy to improve profitability and balance sheet strength through the contraction of its business. Additional strategies include tightening underwriting guidelines, obtaining rate adequacy, reducing operational expenses, closely monitoring loss reserve development and improving information technology.

The ratings for Lutheran Mutual Insurance Company reflect its low underwriting risk, single-state concentration and positive operating performance, which added to its risk-adjusted capitalization during the last five-year period, Best said.

Source: www.ambest.com/ratings

Topics Carriers AM Best