AM Best Withdraws Credit Ratings of State Mutual Insurance Company

Business Wire

OLDWICK, N.J.--(BUSINESS WIRE)-- AM Best has affirmed the Financial Strength Rating (FSR) of B (Fair) and the Long-Term Issuer Credit Rating (Long-Term ICR) of “bb+” of State Mutual Insurance Company (State Mutual) (Rome, GA). The outlook of these Credit ratings (ratings) is stable. Concurrently, AM Best has withdrawn the ratings in response to the company’s request to no longer participate in AM Best interactive rating process.

The ratings reflect State Mutual’s balance sheet strength, which AM Best categorizes as adequate, as well as its marginal operating performance, neutral business profile and marginal enterprise risk management.

The balance sheet strength assessment reflected the long-term declining trend in capital and surplus as a result of capital losses from investments, operating losses due to high expenses and reduced net premiums resulting from reinsurance transactions. While capitalization has been supported in part by reinsurance, AM Best does not view such one-time surplus relief transactions as a viable long-term strategy to support capital. In addition, State Mutual holds higher risk assets in its investment portfolio that reduce liquidity and could result in further capital losses.

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 Understanding Best’s Credit Ratings. For information on the proper media use of Best’s Credit Ratings and AM Best press releases, please view Guide for Media - Proper Use of Best’s Credit Ratings and AM Best Rating Action Press Releases.

AM Best is a global rating agency and information provider with a unique focus on the insurance industry. Visit www.ambest.com for more information.