AM Best Revises Outlooks to Negative for Members of Allegany-Conemaugh Group

Business Wire

OLDWICK, N.J.--(BUSINESS WIRE)--
AM Best has revised the outlooks to negative from stable and affirmed the Financial Strength Rating of A (Excellent) and the Long-Term Issuer Credit Ratings of “a” (Excellent) of Allegany Co-op Insurance Company (Cuba, NY) and Conemaugh Valley Mutual Insurance Company (Johnstown, PA). These companies are collectively referred to as Allegany-Conemaugh Group (Allegany-Conemaugh).

The Credit Ratings (ratings) reflect Allegany-Conemaugh’s balance sheet strength, which AM Best assesses as very strong, as well as its strong operating performance, limited business profile and appropriate enterprise risk management.

The revised outlooks are a result of Allegany-Conemaugh’s key operating performance metrics, which have begun to shift out of alignment with the strong assessment. In 2022, for the second time in the most recent five-year period, the group posted an underwriting loss and a combined ratio above breakeven. Unfavorable results have continued through March 31, 2023, and have been predominately driven by an increase in claims frequency and severity due to inflation and supply chain impacts, weather-related events and increased fire losses. Management continues to employ stringent underwriting guidelines, further develop its product offerings and enhance pricing adequacy to facilitate improvements. Although in the absence of improvements, the ratings may be downgraded.

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.

AM Best is a global credit rating agency, news publisher and data analytics provider specializing in the insurance industry. Headquartered in the United States, the company does business in over 100 countries with regional offices in London, Amsterdam, Dubai, Hong Kong, Singapore and Mexico City. For more information, visit www.ambest.com.