A.M. Best Assigns Credit Ratings to Wisconsin’s CM Select Insurance

May 23, 2018

A.M. Best has assigned a Financial Strength Rating (FSR) of A (Excellent) and a Long-Term Issuer Credit Rating (ICR) of “a” to Wisconsin-based CM Select Insurance Co. (CM Select), a wholly owned subsidiary of Church Mutual Insurance Co. (CMIC).

The outlook assigned to the FSR is stable and the outlook assigned to the Long-Term ICR is positive.

Concurrently, A.M. Best has affirmed the FSR of A (Excellent) and the Long-Term ICR of “a” of CMIC and its subsidiaries, CM Vantage Specialty Insurance Co. (CM Vantage) and CM Regent Insurance Co. (CM Regent) (Mechanicsburg, PA), collectively referred to as Church Mutual Insurance Group. The outlook of the FSR remains stable while the outlook of the Long-Term ICR remains positive.

The ratings of CM Select recognize a 100 percent quota share reinsurance agreement between CM Select and CMIC. Incorporated on May 4, 2017, CM Select will offer products that can be purchased online that are specifically designed to meet the needs of smaller religious organizations. CM Select is expected to strengthen the Church Mutual brand, as it will leverage CMIC’s experience and resources.

The ratings of the group reflect its balance sheet strength, which A.M. Best categorizes as strongest, as well as its adequate operating performance, neutral business profile and appropriate enterprise risk management.

The rating affirmations also reflect the group’s risk-adjusted capitalization at the strongest level, as measured by Best’s Capital Adequacy Ratio, effective reinsurance program, high quality investment portfolio and consistently favorable loss reserve development trends. The rating affirmations further consider the group’s strong operating performance and CMIC’s prominent market position within the religious community, as well as its recent diversification initiatives in complimentary markets.

CMIC maintains a competitive advantage in its niche market and continues to invest and strengthen its brand through development of new products with effective control of distribution channels through the use of captive agents, independent agents, broker markets, excess and surplus lines and forthcoming E-commerce. These positive rating factors are partially offset by the group’s exposure to weather-related events and elevated common stock leverage.

While the outlook for the FSR remains stable, continuation of the positive outlook on the Long-Term ICR reflects the expectation of sustained strong operating performance, despite modest volatility from weather-related events and balance sheet strength maintained at the strongest level. Prospectively, A.M. Best anticipates the group’s capital position to remain strongest with modest volatility in operating results based on management’s robust analytical tool set used to effectively manage exposure concentration and catastrophe tail risk.

Source: A.M. Best

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