A.M. Best Revises Outlook to Negative for German Mutual Insurance Company

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 German Mutual Insurance Company (German Mutual) (Napoleon, OH).

The affirmation of the ratings reflects German Mutual’s adequate risk-adjusted capitalization, its longtime experience in the Ohio marketplace and generally overall favorable operating performance augmented by consistent investment income. In addition, the company continues to refine its underwriting criteria and implement rate increases where applicable.

These positive factors are somewhat offset by German Mutual’s recent unprofitable underwriting performance as a result of frequent and severe weather events, which continue to impact the state of Ohio. As a result, a downward trend in risk-adjusted capitalization has occurred in recent years, in conjunction with moderately elevated underwriting leverage ratios. The negative outlook reflects the concern with the possibility of continuing deterioration in underwriting results, which would put further pressure on German Mutual’s risk-adjusted capitalization.

The principal methodology used in determining these ratings is Best’s Credit Rating Methodology -- Global Life and Non-Life Insurance Edition, which provides a comprehensive explanation of A.M. Best’s rating process and highlights the different rating criteria employed. Additional key criteria utilized include: “Risk Management and the Rating Process for Insurance Companies” and “Understanding BCAR for Property/Casualty Insurers.” Methodologies 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 © 2010 by A.M. Best Company, Inc.ALL RIGHTS RESERVED.

A.M. Best Co.
Raymond Thomson, ARM
Financial Analyst
908-439-2200, ext. 5621
[email protected]
or
Jeffrey Mango, CPA
Assistant Vice President
908-439-2200, ext. 5204
[email protected]
or
Rachelle Morrow
Senior Manager, Public Relations
908-439-2200, ext. 5378
[email protected]
or
Jim Peavy
Assistant Vice President, Public Relations
908-439-2200, ext. 5644
[email protected]

Source: A.M. Best Co.