AM Best Downgrades Credit Ratings of Members of Midwest Family Group
April 30 2024 - 2:36PM
Business Wire
AM Best has downgraded the Financial Strength Rating
(FSR) to A- (Excellent) from A (Excellent) and the Long-Term Issuer
Credit Ratings (Long-Term ICR) to “a-” (Excellent) from “a”
(Excellent) of Midwest Family Mutual Insurance Company and its
wholly owned subsidiary, Midwest Family Advantage Insurance
Company. Collectively, the companies are referred to as Midwest
Family Group (Midwest Family). The outlook of these Credit Ratings
(ratings) is stable. Both companies are domiciled in West Des
Moines, IA.
The ratings reflect Midwest Family’s balance sheet strength,
which AM Best assesses as very strong, as well as its adequate
operating performance, neutral business profile and appropriate
enterprise risk management (ERM).
The rating downgrades reflect erosion in the company’s operating
performance that deviates from the levels of profitability the
group reported in older years. Volatility in Midwest Family’s
underwriting results was impacted by continued reserve
strengthening, elevated storm activity, increased reinsurance
costs, which affected margins, and increased loss severity amid
economic inflation that has been compounded by delays in litigated
claims from court backlogs. Wind and hail deductibles, along with
rate and underwriting initiatives, including non-renewal of risks
outside of recently refined appetites, were implemented to address
underwriting volatility.
The stable outlooks reflect AM Best’s expectation that Midwest
Family will maintain its very strong overall balance sheet strength
assessment, supported by risk-adjusted capitalization at the
strongest level, as measured by Best’s Capital Adequacy Ratio
(BCAR), which generally benefits from reliable surplus growth. AM
Best further expects reserve trends to stabilize as the company
continues its strengthening efforts. The company has a broad
geographical presence and diverse product suite, offered through a
developed network. ERM is assessed as appropriate, taking a
company-wide approach in administering risk practices. The company
further employs a comprehensive reinsurance program that
effectively insulates the balance sheet from shock losses.
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
Services, Inc. and/or its affiliates. ALL RIGHTS RESERVED.
View source
version on businesswire.com: https://www.businesswire.com/news/home/20240430460241/en/
Quentin Harris Senior Financial Analyst +1 908
882 1816 quentin.harris@ambest.com
Christopher Draghi Director +1 908 882 1749
chris.draghi@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