OLDWICK, N.J.–(BUSINESS WIRE)–A.M. Best Co. has revised the outlook to stable from negative and affirmed the financial strength rating (FSR) of B++ (Good) and issuer credit ratings (ICR) of “bbb” of Wisconsin County Mutual Group (WCMG) and its member, Wisconsin County Mutual Insurance Corporation (WCMIC). The ratings are based on the consolidated condition of WCMIC and its separately rated but wholly owned subsidiary, Community Insurance Corporation (CIC). Concurrently, A.M. Best has affirmed the FSR of B+ (Good) and ICR of “bbb-” of CIC. The outlook for CIC’s ratings is negative. All companies are domiciled in Madison, WI.
The revised outlook for WCMG reflects its overall improved operating results as well as its continued strong capitalization. More favorable operating results were generated through WCMIC’s operations and reflect reduced dividend expenditures and (in 2009) favorable loss reserve development. Furthermore, losses at CIC have been reduced from prior years with that company’s exit of its highly unprofitable property and workers’ compensation books of business.
The affirmation of the group’s ratings acknowledges its strong capitalization, expertise within the municipal risk management market and its improved operating performance since 2008. Offsetting these positive rating factors are WCMG’s elevated (while improved) combined ratio, the historical drain on earnings and underwriting cash flows from policyholder dividends and its geographic concentration as a single state insurer.
CIC’s ratings recognize its adequate stand-alone capitalization, corrective actions implemented to improve operating performance in the near term and the explicit support from WCMIC. Offsetting these positive rating factors is CIC’s history of operating losses recorded annually since the company’s inception, its geographic concentration as a single state insurer with minimal product diversification and earnings. The rating outlook acknowledges A.M. Best’s concerns regarding the execution risk associated with reversing CIC’s history of negative operating results. Efforts to reverse negative operating trends have proven largely ineffective as CIC continues to report unfavorable operating results.
WCMIC offers its member counties in Wisconsin coverage for automobile, general liability, workers’ compensation, police professional liability and public officials’ errors and omissions insurance. These coverages are written above deductibles, which range from $1,000 to $1 million per municipality. WCMIC created CIC in 2002 to provide coverages to schools, cities, towns and villages in Wisconsin, while maintaining its services to its core county businesses. CIC initially wrote workers’ compensation and property coverage but currently only offers general liability coverages to its insureds.
The principal methodology used in determining these ratings is Best’s Credit Rating Methodology — Global Life and Non-Life Insurance Edition, which provides a comprehensive explanation of A.M. Best’s rating process and highlights the different rating criteria employed. Additional key criteria utilized include: “Risk Management and the Rating Process for Insurance Companies” and “Understanding BCAR for Property/Casualty Insurers.” Methodologies can be found at www.ambest.com/ratings/methodology.
Founded in 1899, A.M. Best Company is a global full-service credit rating organization dedicated to serving the financial and health care service industries, including insurance companies, banks, hospitals and health care system providers. For more information, visit www.ambest.com.
A.M. Best Co.
Marc Liebowitz, 908-439-2200, ext. 5071
Senior Financial Analyst
Gerard Altonji, 908-439-2200, ext. 5626
Assistant Vice President
Rachelle Morrow, 908-439-2200, ext. 5378
Senior Manager, Public Relations
Jim Peavy, 908-439-2200, ext. 5644
Assistant Vice President, Public Relations