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Press release content from Business Wire. The AP news staff was not involved in its creation.
PRESS RELEASE: Paid content from Business Wire
Press release content from Business Wire. The AP news staff was not involved in its creation.

AM Best Revises Outlooks to Negative for Members of Wisconsin Reinsurance Group

August 17, 2021 GMT

OLDWICK, N.J.--(BUSINESS WIRE)--Aug 17, 2021--

AM Best has revised the outlooks to negative from stable and affirmed the Financial Strength Rating of B++ (Good) and the Long-Term Issuer Credit Ratings of “bbb” (Good) of Wisconsin Reinsurance Corporation (WRC) and 1st Auto & Casualty Insurance Company (1st Auto), collectively referred to as Wisconsin Reinsurance Group (WRG) (Madison, WI).

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

The revised outlooks reflect deterioration in the group’s operating performance largely associated with weather-related events due to its concentration in the Midwest. WRG’s recent performance has been pressured by declining profitability in reinsured business written by client companies, as well as continued weak performance in the direct auto insurance book. Without sustained improvement, this could lead to a decline in the overall assessment of operating performance in the near to intermediate term.

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WRG’s maintains strong overall balance sheet strength, supported by the strongest level of risk-adjusted capitalization, as measured by Best’s Capital Adequacy Ratio. This position is somewhat offset by surplus declines in three out of the past five years and elevated underwriting leverage metrics relative to the composite. The limited business profile reflects the group’s geographic concentration in the Midwest region, which is partially mitigated through a comprehensive reinsurance program. ERM is assessed as appropriate for the group’s risk profile, based on a formal ERM policy that includes defined risk appetite and tolerance thresholds with emphasis placed on strong corporate governance.

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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 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.

Copyright © 2021 by A.M. Best Rating Services, Inc. and/or its affiliates. ALL RIGHTS RESERVED.

View source version on businesswire.com:https://www.businesswire.com/news/home/20210817005727/en/

CONTACT: Maurice Thomas

Senior Financial Analyst

+1 908 439 2200, ext. 5794

maurice.thomas@ambest.comChristopher Sharkey

Manager, Public Relations

+1 908 439 2200, ext. 5159

christopher.sharkey@ambest.comMichelle Baurkot

Director

+1 908 439 2200, ext. 5314

michelle.baurkot@ambest.comJim Peavy

Director, Communications

+1 908 439 2200, ext. 5644

james.peavy@ambest.com

KEYWORD: EUROPE UNITED STATES NORTH AMERICA NEW JERSEY

INDUSTRY KEYWORD: INSURANCE PROFESSIONAL SERVICES

SOURCE: AM Best

Copyright Business Wire 2021.

PUB: 08/17/2021 10:55 AM/DISC: 08/17/2021 10:56 AM

http://www.businesswire.com/news/home/20210817005727/en