AM Best Downgrades Credit Ratings of RAM Mutual Insurance Company; Places Credit Ratings Under Review With Negative Implications
AM Best has downgraded the Financial Strength Rating to B++ (Good) from A- (Excellent) and the Long-Term Issuer Credit Rating to “bbb+” (Good) from “a-” (Excellent) of
The ratings reflect RAM’s balance sheet strength, which AM Best assesses as very strong, as well as its marginal operating performance, limited business profile and appropriate enterprise risk management (ERM).
The rating downgrades reflect deterioration in RAM’s operating results and subsequent policyholder surplus loss through
RAM’s ratings being placed under review with negative implications reflects the uncertainty, timing and execution risks of capital infusions from the issuance of Guarantee Certificates to township mutual members to try and stabilize policyholder surplus and overall risk-adjusted capitalization. RAM’s Board of Directors and management have initiated a capital program of raising capital through Guaranteed Certificate Funds through their township mutuals to help strengthen their balance sheet metrics. The program was approved by the
Furthermore, AM Best remains concerned regarding the uncertainty and cost of RAM’s 2024 reinsurance program and its potential impact on balance sheet metrics; to date the program has not been finalized. Also, further pressuring the balance sheet strength is RAM’s elevated net and gross underwriting leverage metrics, and increased reinsurance dependence, as measured by ceded leverage and increased net catastrophe retention. The business profile assessment reflects RAM’s geographic concentration in
This press release relates to Credit Ratings that have been published on AM 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 AM Best’s Recent Rating Activity web page. For additional information regarding the use and limitations of Credit Rating opinions, please view Guide to Best's Credit Ratings. For information on the proper use of Best’s Credit Ratings, Best’s Performance Assessments, Best’s Preliminary Credit Assessments and AM Best press releases, please view Guide to Proper Use of Best’s Ratings & Assessments.
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