AM Best Affirms Credit Ratings of Members of MedPro Group
18 Julio 2024 - 8:40AM
Business Wire
AM Best has affirmed the Financial Strength Rating of A++
(Superior) and the Long-Term Issuer Credit Ratings of “aa+”
(Superior) of the members of MedPro Group (MedPro). These Credit
Ratings (ratings) apply to The Medical Protective Company (Fort
Wayne, IN) and its affiliates: Princeton Insurance Company
(Princeton, NJ); PLICO, Inc. (Oklahoma City, OK); Wellfleet
Insurance Company (Fort Wayne, IN); and Wellfleet New York
Insurance Company (Flushing, NY); as well as MedPro’s two reinsured
affiliates, MedPro RRG Risk Retention Group and AttPro RRG
Reciprocal Risk Retention Group (both domiciled in the District of
Columbia). The outlook of these ratings is stable.
The ratings reflect MedPro’s balance sheet strength, which AM
Best assesses as strongest, as well as its strong operating
performance, favorable business profile and appropriate enterprise
risk management.
The ratings acknowledge MedPro’s risk-adjusted capitalization
being at the strongest level, as measured by Best’s Capital
Adequacy Ratio (BCAR), as well as the group’s long-term profitable
operating performance and the leading market position it maintains
in the medical professional liability (MPL) sector, proving the
group’s ability to underwrite profitably through market cycles.
Additionally, the ratings consider the group’s substantial
distribution capabilities, prudent claims-handling philosophy and
culture of holistic risk management. The group consistently
outperforms peers by most metrics, illustrated by substantial
historical returns on equity, low operating ratios and solid net
underwriting income. Furthermore, the ratings benefit from the
explicit and implicit financial support provided by its affiliate,
National Indemnity Company, and MedPro’s ultimate parent, Berkshire
Hathaway Inc. [NYSE: BRK A and BRK B], which includes reinsurance
programs, investment opportunities and capital support.
Partially offsetting these positive rating factors are the
inherent challenges associated with the MPL line of business,
particularly as it relates to price competition, changing market
dynamics, potential changes in legislation (i.e., tort reform),
increasing loss cost trends and regulatory risk. At the same time,
AM Best recognizes the organization’s strong management team,
diversified premium base and jurisdictional diversity, which have
contributed to MedPro outperforming its peers over the longer
term.
The group’s large allocation to common stocks exposes it to
significant volatility during periods when the equity markets
experience sharp declines. The group has demonstrated its ability
to absorb this volatility historically and maintain the strongest
level of risk-adjusted capitalization, as measured by BCAR, due to
its low underwriting leverage, driven by its affiliated reinsurance
agreement with National Indemnity Company and MedPro’s substantial
capital position, and the investment managers’ historical trend of
success in turbulent markets.
This press release relates to Credit Ratings that have been
published on AM 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 AM Best’s Recent
Rating Activity web page. For additional information
regarding the use and limitations of Credit Rating opinions, please
view Guide to Best's Credit Ratings. For information
on the proper use of Best’s Credit Ratings, Best’s Performance
Assessments, Best’s Preliminary Credit Assessments and AM Best
press releases, please view Guide to Proper Use of Best’s
Ratings & Assessments.
AM Best is a global credit rating agency, news publisher and
data analytics provider specializing in the insurance
industry. Headquartered in the United States, the company does
business in over 100 countries with regional offices in London,
Amsterdam, Dubai, Hong Kong, Singapore and Mexico City. For more
information, visit www.ambest.com.
Copyright © 2024 by A.M. Best Rating
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Christopher Pennings, CPCU Financial Analyst +1
908 882 2237 christopher.pennings@ambest.com Gregory
Dickerson Director +1 908 882 1737
gregory.dickerson@ambest.com Christopher Sharkey
Associate Director, Public Relations +1 908 882 2310
christopher.sharkey@ambest.com Al Slavin Senior Public
Relations Specialist +1 908 882 2318
al.slavin@ambest.com