Ratings of Ohio’s Wayne Mutual Insurance Upgraded

January 26, 2021

AM 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 Wayne Mutual Insurance Co. (Wayne Mutual) in Wooster, Ohio.

The outlook of these ratings has been revised to stable from positive.

Wayne Mutual Insurance Co. is part of the Wayne Insurance Group, which also offers insurance through Washington Mutual Insurance Association. The group provides home, farm, automobile and business owners insurance throughout Ohio via a network of more than 140 independent insurance agents.

The ratings reflect Wayne Mutual’s balance sheet strength, which AM Best categorizes as very strong, strong operating performance, limited business profile and appropriate enterprise risk management.

The rating upgrades reflect Wayne’s very strong balance sheet strength supported by risk-adjusted capitalization at the strongest level, as measured by Best’s Capital Adequacy Ratio (BCAR), and consistently profitable operating performance over the most recent five-year period.

Risk-adjusted capitalization is reflective of the company’s moderate underwriting leverage, a conservative investment portfolio and favorable accident and calendar-year loss reserving trends.

Wayne’s capital position is enhanced further through consistent surplus growth, with additions to surplus for five consecutive years and continuing throughout 2020. Liquidity measures are strong and enhanced by positive operating cash flows on a year-over-year basis.

Operating performance consistently has been profitable over the most recent five-year period, generated by solid underwriting performance, as demonstrated by its reported five-year average combined ratio of 89.6%, which outperformed the private passenger standard auto and homeowners composite average.

These strong underwriting results resulted from management’s strict underwriting standards and successful niche strategy of controlled growth in integrating several Mutual Protective Associations throughout rural Ohio into its operations.

Operating results through the first nine months of 2020, and projected through year-end, are strong, yielding sizeable surplus growth. Underwriting income, supplemented with steady net investment earnings, have produced favorable operating and total return measures that outperform composite averages over the most recent five-year period.

Wayne’s business profile is categorized as limited as it is a single-state writer in Ohio, which exposes results to severe weather-related events, adverse judicial decisions and regulatory changes.

However, the company adheres to a formalized ERM program that identifies major risks to the organization, with correlating mitigation strategies to offset and monitor them, including a comprehensive reinsurance program and membership in local and national insurance lobbying organizations.

Source: AM Best

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