AM Best has downgraded the Financial Strength Rating to B (Fair) from B+ (Good) and the Long-Term Issuer Credit Rating to “bb+” from “bbb-” of Cameron Mutual Insurance Co. (Cameron Mutual) in Cameron, Missouri.
The outlook of these ratings remains stable.
Formed in 1892 as the Farmers Mutual Tornado, Cyclone and Windstorm Association, the company writes property/casualty insurance business in Missouri, Arkansas and Iowa. It has a branch claims office located in Springfield, Missouri.
Policyholders voted in 1968 to change the name to Cameron Mutual Insurance Co.
The ratings reflect Cameron Mutual’s balance sheet strength, which AM Best categorizes as strong, as well as its marginal operating performance, limited business profile and marginal enterprise risk management (ERM).
The rating downgrades reflect a revision in AM Best’s assessment of Cameron Mutual’s balance sheet strength to strong from very strong, given ongoing surplus erosion and increasing underwriting leverage ratios, which are well in excess of the composite.
Management has responded by initiating several corrective actions including a quota share agreement, targeted non-renewals and stricter underwriting guidelines; however, results have not yet benefited from these actions.
Cameron Mutual’s balance sheet strength reflects the very strong level of risk-adjusted capitalization, as measured by Best’s Capital Adequacy Ratio (BCAR), a comprehensive reinsurance program and historically favorable reserve development, which is somewhat offset by declining risk-adjusted capitalization.
Cameron Mutual’s operating performance continues to experience volatility, largely related to weather-related losses and increased frequency and severity of auto claims. The limited business profile reflects the company’s geographic concentration in the Midwest region and exposure to severe weather-related losses.
AM Best views Cameron Mutual’s ERM as marginal, as the program is continuing to address operating volatility and above average leverage measures.
Cameron Mutual writes commercial, personal and farm insurance, and offers multi-policy discounts, according to information on the company’s website.
Source: AM Best, Cameron Mutual
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