AM Best Revises Outlooks to Negative for Mutual Benefit Group Members
31 Julio 2024 - 12:18PM
Business Wire
AM Best has revised the outlooks to negative from stable
and affirmed the Financial Strength Rating of A- (Excellent) and
the Long-Term Issuer Credit Ratings (Long-Term ICRs) of “a-”
(Excellent) of Mutual Benefit Insurance Company and Select Risk
Insurance Company. These companies are members of Mutual Benefit
Group (Mutual Benefit) and are domiciled in Huntingdon, PA.
The Credit Ratings (ratings) reflect Mutual Benefit’s balance
sheet strength, which AM Best assesses as very strong, as well as
its adequate operating performance, limited business profile and
appropriate enterprise risk management.
The revised outlooks to negative from stable of the Long-Term
ICRs consider a deviation in Mutual Benefit’s operating results in
more recent years. Deterioration of operating performance resulting
from increased frequency of losses with the majority of losses
being retained by the group as they did not breach retention
levels. Additionally, the expense ratio has been elevated due to
one-time expenses from technology write-offs of an old system and
employee severance. Due to the aforementioned occurrences, results
in the last two years have deviated from projections with elevated
losses and minimal loss recoveries. While results showed
improvements to a degree in 2023, loss frequency and expense
related items still impacted operating results.
Mutual Benefit’s management team has implemented initiatives to
help mitigate volatility, which includes significant rate action,
specific exclusions and continued refinement of underwriting
standards. Property inspections and increased deductibles are
expected to help mitigate volatility as well. Mutual Benefit
currently has a new technology initiative in place to improve its
technology, enable smoother product development and create a new
agency interface to be able to integrate pricing and other tools.
AM Best expects these actions to help Mutual Benefit improve its
current level of operating performance. Results through 2024 have
shown improvements, but absent a trend of stabilized and
sustainable improvements in operating metrics, the ratings are
likely to be downgraded.
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.
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Josie Novak Financial Analyst +1 908 882
2207 josie.novak@ambest.com
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Relations +1 908 882 2310
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908 882 2318 al.slavin@ambest.com