A.M. Best has revised the outlooks to positive from stable and affirmed the Financial Strength Rating of A- (Excellent) and the Long-Term Issuer Credit Rating (Long-Term ICR) of “a-” of Northern Mutual Insurance Company (MI) (NMIC) in Hancock, Michigan.
NMIC offers homeowners, dwelling fire and auto insurance through independent agents.
The ratings reflect NMIC’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.
The revision in the outlooks reflects the favorable trend in NMIC’s underwriting and overall operating performance over the current five-year period, which continues to strengthen its policyholders’ surplus. The company’s improved earnings are attributable to actions taken by management, which includes rate increases, expense reassessment and technology improvements. The company’s overall surplus has continued to improve over the past five years and has strengthened its overall balance sheet assessment. The business profile is limited, primarily due to its geographic and its product concentration as a mainly personal property insurer in Michigan.
The rating affirmations reflect NMIC’s risk-adjusted capitalization being at the strongest level, the management team’s experience in their niche and focus on underwriting fundamentals. These factors are offset partially by the current market competitive conditions within the personal property market in which NMIC operates.
Positive rating movement may be considered following continued improvement in the company’s operating performance over the near term. Negative credit rating action may occur if NMIC’s results deteriorate significantly or if there is a weakening in its risk-adjusted capitalization.
Source: A.M. Best
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