A.M. Best Upgrades Credit Ratings of Lawyers Mutual Liability Insurance Company of North Carolina

OLDWICK, N.J.--(BUSINESS WIRE)-- A.M. Best has upgraded the Financial Strength Rating to A (Excellent) from A- (Excellent) and the Long-Term Issuer Credit Rating to “a” from “a-“ of Lawyers Mutual Liability Insurance Company of North Carolina (LML) (Cary, NC). The outlooks of these Credit Ratings (ratings) have been revised to stable from positive.

The rating upgrades reflect LML’s solid operating performance, which outperformed its peers and the composite average. The ratings also reflect LML’s strong and highly liquid balance sheet, favorable loss reserve development, solid enterprise risk management framework and management's long-standing expertise in the North Carolina legal professional liability sector.

The company's focus is on small to medium size firms and sole practitioners and its mission to be a stable market for lawyers in North Carolina while actively serving the legal community. The ratings also consider the diversification benefit derived from the various areas of practice the company insures and its ability to adjust its exposure in each of these areas based on overall performance. Partially offsetting these positive rating factors is the company's limited business profile, writing one line of business, which subjects it to a higher degree of risk from fluctuations in the underwriting cycle, economic conditions in the state, changes in the housing market and changes in North Carolina's regulatory, legislative and judicial environments.

The balance sheet is strong and has gained strength in recent years due to organic surplus growth, lower loss reserves and modest premium risk growth. Risk-adjusted capitalization is highly supportive of the ratings. Underwriting leverage ratios are also favorable and showing improvement. The balance sheet is highly liquid with a good mix of highly rated securities in the fixed income portfolio supplemented by non-affiliated common stock and affiliated investments. Reserves have declined in recent years as the result of the company’s focus on closing claims more quickly and lower new claim counts resulting from lower claim frequency and greater attention on claims and reserving.

This press release relates to Credit Ratings 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 see A.M. Best’s Recent Rating Activity web page. For additional information regarding the use and limitations of Credit Rating opinions, please view Understanding Best’s Credit Ratings. For information on the proper media use of Best’s Credit Ratings and A.M. Best press releases, please view Guide for Media - Proper Use of Best’s Credit Ratings and A.M. Best Rating Action Press Releases.

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

Copyright © 2017 by A.M. Best Rating Services, Inc. and/or its subsidiaries. ALL RIGHTS RESERVED.

View source version on businesswire.com: http://www.businesswire.com/news/home/20170920006247/en/

A.M. Best

Janet Hernandez, +1 908-439-2200, ext. 5767

Senior Financial Analyst

[email protected]

or

Christopher Sharkey, +1 908-439-2200, ext. 5159

Manager, Public Relations

[email protected]

or

Richard Attanasio, +1 908-439-2200, ext. 5232

Senior Director

[email protected]

or

Jim Peavy, +1 908-439-2200, ext. 5644

Director, Public Relations

[email protected]

Source: A.M. Best