A.M. Best Revises Outlook to Positive for Wisconsin Municipal Mutual Insurance Company

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

The revised outlook reflects the continuation of WMMIC’s favorable operating performance, low underwriting leverage, both gross and net as to reinsurance, and resulting high level of risk-adjusted capitalization; all of which are supportive of the current and prospective ratings. Driving these positive rating factors are the company’s solid relationships with its members, a conservative operating and investment strategy and continued favorable loss reserve development trends.

These positive rating factors are partially offset by limitations with respect to WMMIC’s pool of policyholders, product offerings and its geographic concentration of risk. Although the company benefits from tort caps that limit indemnity losses at the state level, claims that are settled within the federal court system are not subject to caps on liability losses and potentially expose the company to high severity losses. As a single state writer, WMMIC’s results are exposed to judicial, economic and regulatory changes. Any material changes could potentially have a negative impact on the company's overall results.

Positive rating action in future rating cycles is contingent upon continued favorable underwriting and earnings trends while maintaining supportive overall risk-adjusted capitalization. However, negative rating action could occur if there were a material, negative change in operating results, a decline in overall risk-adjusted capitalization or a change in business profile that disrupts the company's current business plan.

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. Best's Credit Rating Methodology can be found at www.ambest.com/ratings/methodology.

Key insurance criteria reports utilized:

• Risk Management and the Rating Process for Insurance Companies
• Understanding BCAR for Property/Casualty Insurers

This press release relates to rating(s) that have been published on A.M. 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 visit A.M. Best’s Ratings & Criteria Center.

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 © 2015 by A.M. Best Company, Inc.ALL RIGHTS RESERVED.

A.M. Best

Victoria Riggs, 908-439-2200, ext. 5039

Financial Analyst

vicky.riggs@ambest.com

or

Gerard Altonji, 908-439-2200, ext. 5626

Assistant Vice President

gerard.altonji@ambest.com

or

Christopher Sharkey, 908-439-2200, ext. 5159

Manager, Public Relations

christopher.sharkey@ambest.com

or

Jim Peavy, 908-439-2200, ext. 5644

Assistant Vice President, Public Relations

james.peavy@ambest.com

Source: A.M. Best Company, Inc.