OLDWICK, N.J.--(BUSINESS WIRE)-- A.M. Best Co. has revised the outlook to negative from stable and affirmed the financial strength rating of A- (Excellent) and issuer credit rating of “a-” of Wisconsin Mutual InsuranceCompany (WMIC) ( Madison, WI).

The negative outlook reflects WMIC’s trend of poor underwriting performance from increased frequency and severity of weather-relate events and from a large claims settlement, which resulted in a loss of surplus in some years. The outlook also considers the impact on the future underwriting performance of WMIC due to an increase in the amount of catastrophe risk the company retains.

The ratings acknowledge WMIC’s solid capitalization, established market presence in Wisconsin and favorable underwriting expense ratio. WMIC’s solid risk-adjusted capital position is attributed to its modest underwriting leverage and relatively conservative investment portfolio. WMIC’s operating performance was impacted by losses from severe winter weather and frequent hail storms over the past two years. Nevertheless, underwriting profitability continued to be management’s focus driven by closely managed growth initiatives, strict underwriting guidelines and rate modifications, while maintaining its competitive expense structure.

Future negative rating and/or outlook revisions may occur if there is a continuation of negative operating results, which cause a further decline in WMIC policyholders’ surplus over the intermediate term.

The methodology used in determining these ratings is Best’s Credit Rating Methodology, which provides a comprehensive explanation of A.M. Best’s rating process and contains the different rating criteria employed in the rating process. Key criteria utilized include: “Risk Management and the Rating Process for Insurance Companies”; “Understanding BCAR for Property/Casualty Insurers”; and “Catastrophe Analysis in A.M. Best Ratings.” Best’s Credit Rating Methodology can be found at www.ambest.com/ratings/methodology.

Founded in 1899, A.M. Best Company is the world’s oldest and most authoritative insurance rating and information source. For more information, visit www.ambest.com.

Copyright © 2012 by A.M. Best Company, Inc.ALL RIGHTS RESERVED.

A.M. Best Co.
Kevin Dorsey
Senior Financial Analyst
(908) 439-2200, ext. 5401
kevin.dorsey@ambest.com
or
Gary Davis
Assistant Vice President
(908) 439-2200, ext. 5565
gary.davis@ambest.com
or
Rachelle Morrow
Senior Manager, Public Relations
(908) 439-2200, ext. 5378
rachelle.morrow@ambest.com
or
Jim Peavy
Assistant Vice President, Public Relations
(908) 439-2200, ext. 5644
james.peavy@ambest.com

Source: A.M. Best Co.