Oldwick, NJ -(BusinessWire)- Effective November 20, 2013, A.M. Best Co. revised the outlook to negative from stable and affirmed the financial strength rating of A- (Excellent) and issuer credit ratings of “a-” of Midwest Builders’ Casualty Mutual Company (MWBC) (Kansas City, MO) and its two wholly owned reinsured subsidiaries, Bearing Midwest Casualty Company (Bearing) and Horizon Midwest Casualty Company (Horizon). Bearing and Horizon are 100% quota share reinsured by MWBC.
The ratings reflect MWBC’s supportive risk-adjusted capitalization, historically favorable reserve development and the benefits of being a specialized workers’ compensation insurer servicing the commercial construction industry.
These factors are offset by MWBC’s significant product and geographic concentration, less than historic operating performance over the past few years, the challenges associated with a slow economy, low new money yields and the potential for continuing decline of its favorable reserve development.
The ratings could be downgraded if the company continues to experience weakening combined and operating ratios; it experiences material adverse reserve development; or capital adequacy declines materially as measured by Best’s Capital Adequacy Ratio (BCAR). However, the outlook for MWBC’s ratings could be revised to stable if performance trends improve markedly over time, reserve development remains favorable and surplus growth continues commensurate with premium growth sufficient to support future loss experience and trends.
Source: BusinessWire