A.M. Best has upgraded the Financial Strength Rating to A (Excellent) from A- (Excellent) and the Long-Term Issuer Credit Rating to “a” from “a-” of Wisconsin Mutual Insurance Co. (Wisconsin Mutual) in Madison, Wisconsin.
The outlook of these ratings has been revised to stable from positive.
The ratings reflect Wisconsin Mutual’s balance sheet strength, which A.M. Best categorizes as very strong, as well as its strong operating performance, limited business profile and appropriate enterprise risk management (ERM).
The ratings upgrade is based on the company’s strong underwriting and operating performance over the past several years as reflected by combined ratios and pretax return on revenue measures that outperformed the composite on both a five- and 10-year basis.
A.M. Best expects prospective operating results to remain strong with low to moderate volatility in key performance metrics.
Wisconsin Mutual’s ratings also reflect its very strong balance sheet, which is supported by its risk-adjusted capitalization being at the strongest level, as measured by Best’s Capital Adequacy Ratio (BCAR), high quality investment portfolio with strong liquidity and favorable loss reserve development trends.
These positive attributes are offset partially by the company’s limited financial flexibility as a mutual organization. The business profile is limited as reflected by the company’s geographic concentration in Wisconsin with product offerings focused primarily in the private passenger automobile, homeowners and farmowners lines of business.
The ERM framework and risk management capabilities are considered appropriate for the risk profile of the company. The company maintains a comprehensive reinsurance program that mitigates tail-risk exposure to catastrophic loss events as evidenced by BCAR at the 99.8 percent confidence level.
The stable outlooks are based on A.M. Best’s expectation that Wisconsin Mutual’s operating performance will remain strong while maintaining its very strong level of balance sheet strength despite any impact from weather-related events.
Source: A.M. Best
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