A.M Best Downgrades Ratings of Mid-Continent Insurance Company

OLDWICK, N.J.--(BUSINESS WIRE)-- A.M. Best Co. has downgraded the financial strength rating to B+ (Good) from B++ (Good) and issuer credit rating to “bbb-” from “bbb” of Mid-Continent Insurance Company (Mid-Continent) (Somerset, PA). The outlook for both ratings is negative.

The rating downgrades reflect Mid-Continent’s heavy underwriting and operating losses since 2007, which has led to declining surplus levels and elevated leverage measures.

Mid-Continent has incurred heightened underwriting losses since 2007, due to adverse loss reserve development and increased loss severity, as well as a higher frequency on its liability book of business. Nonetheless, Mid-Continent has maintained adequate risk-adjusted capitalization and liquidity ratios and has an established regional market presence. Furthermore, management has implemented a number of initiatives to reverse the current negative operating trends, although such initiatives have yet to reverse Mid-Continent’s operating losses.

The rating outlook recognizes the execution risk of implementing Mid-Continent management’s corrective action plan and the potential for additional surplus loss if these actions fail to reverse the company’s negative operating trends.

For Best’s Credit Ratings, an overview of the rating process and rating methodologies, please visit www.ambest.com/ratings.

The principal methodologies used in determining these ratings, including any additional methodologies and factors that may have been considered, can be found at www.ambest.com/ratings/methodology.

Founded in 1899, A.M. Best Company is a global full-service credit rating organization dedicated to serving the financial and health care service industries, including insurance companies, banks, hospitals and health care system providers. For more information, visit www.ambest.com.

A.M. Best
Analysts:
Marc Liebowitz, 908-439-2200, ext. 5071
[email protected]
Gerard Altonji, 908-439-2200, ext. 5626
[email protected]
or
Public Relations:
Rachelle Morrow, 908-439-2200, ext. 5378
[email protected]
Jim Peavy, 908-439-2200, ext. 5644
[email protected]

Source: A.M. Best Co.