A.M. Best Upgrades Issuer Credit Ratings of Members of MAG Mutual Group
OLDWICK, N.J.--(BUSINESS WIRE)--Aug 3, 2018--A.M. Best has upgraded the Long-Term Issuer Credit Rating to “a+” from “a” and affirmed the Financial Strength Rating of A (Excellent) of MAG Mutual Insurance Company (Atlanta, GA) and ProfessionalSecurity Insurance Company (Scottsdale, AZ), collectively known as MAG Mutual Group. The outlook of these Credit Ratings (ratings) is stable.
The ratings reflect the MAG Mutual Group’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 (ERM).
The balance sheet strength is supported by strongest risk-adjusted capitalization, as measured by Best’s Capital Adequacy Ratio (BCAR), historically favorable loss reserve development, modest financial leverage and history of organic surplus growth. In addition, liquidity is adequate and supported by an invested asset base that predominantly consists of high-quality fixed-income securities.
A.M. Best considers MAG Mutual Group’s operating performance to be adequate when measured on a pre-dividend combined ratio and operating ratio basis. However, significant challenges exist due to changes in U.S. health care and its effects on this organization’s mix of business and earnings prospects. Despite the challenges, the group produced pre-tax operating profits in each of the past five years, as investment income supported policyholder dividends.
The business profile assessment reflects the group’s standing as a regional medical professional liability (MPL) insurance provider operating primarily in the Southeastern United States. Although the group remains heavily concentrated in the MPL sector, management’s diversification efforts in recent years have allowed the group to take advantage of new business opportunities in an otherwise challenging business environment. Nevertheless, the concentration of risk in MPL insurance exposes the group to changes in the U.S. health care system, judicial climate, regulatory environment and state tort reform laws. With regard to its ERM, the group has a framework to identify and manage various different types of risks, a process A.M. Best views as appropriate for its risk profile.
Further positive rating action could result if the group’s underwriting results were to improve relative to peers while maintaining a balance sheet strength assessment at the strongest level as the group manages through the current challenging market cycle. Negative rating action could result if material adverse development were to emerge that negatively impacts underwriting profitability and leads to deteriorating operating performance.
This press release relates to Credit Ratings that have been published on A.M. Best’s website. For all rating information relating to the release and pertinent disclosures, including details of the office responsible for issuing each of the individual ratings referenced in this release, please see A.M. Best’s web page. For additional information regarding the use and limitations of Credit Rating opinions, please view . For information on the proper media use of Best’s Credit Ratings and A.M. Best press releases, please view .
Copyright © 2018 by A.M. Best Rating Services, Inc. and/or its affiliates. ALL RIGHTS RESERVED.
View source version on businesswire.com:https://www.businesswire.com/news/home/20180803005426/en/
CONTACT: A.M. Best
Sharon Pereira Marks, +1 908 439 2200, ext. 5477
Senior Financial Analyst
Charles M. Huber, +1 908 439 2200, ext. 5122
Christopher Sharkey, +1 908 439 2200, ext. 5159
Manager, Public Relations
Jim Peavy,+1 908 439 2200, ext. 5644
Director, Public Relations
KEYWORD: UNITED STATES EUROPE NORTH AMERICA ARIZONA GEORGIA NEW JERSEY
INDUSTRY KEYWORD: PROFESSIONAL SERVICES INSURANCE
SOURCE: A.M. Best
Copyright Business Wire 2018.
PUB: 08/03/2018 01:18 PM/DISC: 08/03/2018 01:18 PM