A.M. Best Revises Credit Rating Outlook of Builders Mutual Companies of North Carolina

A.M. Best has revised the outlook to positive from stable for the Long-Term Issuer Credit Rating (Long-Term ICR) and affirmed the Financial Strength Rating (FSR) of A (Excellent) and Long-Term ICR of “a” of Builders Mutual Insurance Co. and Builders Premier Insurance Co., collectively referred to as Builders Mutual Insurance Group (Builders Mutual, headquartered in Raleigh, N.C. The outlook of the FSR remains stable.

According to a statement from Best, the ratings reflect Builders Mutual’s balance sheet strength, which A.M. Best categorizes as strongest, as well as its adequate operating performance, neutral business profile and appropriate enterprise risk management.

The positive outlook reflects a trend of favorable underwriting performance that has consistently outperformed the composite on a five- and 10-year basis, Best said. Favorable results are attributable to the company’s ability to obtain and maintain preferred business, which is augmented by its solid reputation in key markets, leading to more profitable loss experience.

A.M. Best noted that positive rating pressures may materialize if continued strength in operating earnings and the resulting return on revenue measures are sustained and remain in excess of peers. Negative rating pressures could occur if there is a sustained weakening of operating performance relative to peers that results in a material impact on the capital strength of the company.

Source: A.M. Best