AM Best Upgrades Credit Rating of Upland Mutual Insurance in Kansas

November 4, 2020

AM 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 Junction, Kansas-based Upland Mutual Insurance Inc. (Upland).

The outlook of the Long-Term ICR has been revised to stable from positive, while the outlook of the FSR is stable.

Upland was established in 1896 to provide fire and lightning insurance to local farmers in the Upland, Kansas-area. The company has expanded its insurance products offerings and its service footprint to include the entire state of Kansas. It is represented in Kansas by more than 250 independent insurance agencies. Insurance products include homeowners, farmowners, dwelling fire, mobile homes, farm property, and personal and farm auto.

The Credit Ratings (ratings) reflect Upland’s balance sheet strength, which AM Best categorizes as very strong, as well as its adequate operating performance, limited business profile and appropriate enterprise risk management.

The upgrade of the Long-Term ICR is the result of favorable trends in Upland’s balance sheet strength. This is due to continued improvements in policyholder surplus levels, leverage ratios and risk-adjusted capitalization. Overall, risk-adjusted capitalization, as measured by Best’s Capital Adequacy Ratio (BCAR), is strongest.

Due to Upland’s profitability in recent years, surplus growth has outpaced growth in net premiums written. This has caused strong surplus appreciation in the latest five years and Upland passing the $20 million threshold for surplus. This growth has led to improvements in the company’s leverage ratios and risk-adjusted capitalization consistently.

Upland has limited scale of operations. The company’s business profile is limited due to the product offerings as a single-state property insurer and geographic concentration in Kansas.

Source: AM Best

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