Rating of Michigan’s Wolverine Mutual Insurance Upgraded

January 19, 2018

A.M. Best has upgraded the Long-Term Issuer Credit Rating (Long-Term ICR) to “bbb+” from “bbb” and affirmed the Financial Strength Rating (FSR) of B++ (Good) of Wolverine Mutual Insurance Co. (Wolverine), in Dowagiac, Michigan. The outlook of the Long-Term ICR has been revised to stable from positive while the outlook of the FSR remains stable.

The ratings reflect Wolverine’s balance sheet strength, which A.M. Best categorizes as very strong, as well as its adequate operating performance, limited business profile and appropriate enterprise risk management. Wolverine has strengthened its capitalization in recent years, which can be attributed to improved underwriting income, resulting in surplus growth that has outpaced overall premium growth. The company’s modest investment leverage and consistently favorable loss reserve development also are factors in the more robust capitalization levels.

Underwriting performance continues to improve due to re-underwriting and re-inspecting property lines, as well as more-focused efforts on fighting automobile fraud and excessive medical billing claims. In addition, the company’s leverage measures are elevated when compared with the composite; however, they are on a downward trend as a result of the continued surplus growth.

Conversely, Wolverine’s geographic concentration exposes surplus to frequent and severe weather events, which the company has experienced in recent years, as well as the judicial and regulatory environment. Most notable is automobile personal injury protection coverage, which continues to be a challenge for all companies with this exposure in Michigan. However, management’s extensive expertise contributes to the company’s profitable automobile book of business.

Source: A.M. Best

Topics Michigan AM Best

Was this article valuable?

Here are more articles you may enjoy.