AM Best Places Credit Ratings of Pharmacists Mutual Insurance Group’s Members Under Review With Negative Implications
March 28 2024 - 1:40PM
Business Wire
AM Best has placed under review with negative
implications the Financial Strength Rating of A- (Excellent) and
the Long-Term Issuer Credit Ratings of “a-” (Excellent) of
Pharmacists Mutual Insurance Company (PMIC) and its wholly owned
reinsured subsidiary, Chiron Insurance Company (Chiron). At the
same time, AM Best has placed under review with negative
implications the Long-Term Issue Credit Rating of “bbb” (Good) of
the $25 million, 7.375% surplus notes, due 2039, issued by PMIC.
These companies are domiciled in Algona, IA and collectively
referred to as PMIG or the group.
These Credit Ratings (ratings) have been placed under review
following a substantial decline in the group’s policyholder surplus
and overall risk-adjusted capitalization through Dec. 31, 2023,
driven primarily by continued underwriting losses and unexpected
adverse loss reserve development on prior year claims. Although
PMIG is in the process of exiting the personal lines sector, the
unfavorable reserve development was primarily caused by both the
personal and commercial auto lines, as well as commercial
multi-peril and workers compensation lines of business. As a
result, the group’s key balance sheet strength metrics are no
longer supportive of the current assessment.
At present, management is actively pursuing various capital
management strategies aimed at bolstering policyholder surplus,
reducing net volatility and mitigating additional reserving
deficiencies. AM Best’s expectation is that these strategies will
improve in the group’s current position and be applied within the
next few months, subject to finalizing terms and regulatory
approvals. The ratings will remain under review until AM Best can
properly analyze the group’s rating fundamentals following
implementation. However, should the group fail to follow through on
these initiatives, or fail to facilitate meaningful improvement in
its current risk-adjusted capital position, 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.
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Lauren Magro Financial Analyst +1 908 882
2082 lauren.magro@ambest.com
Christopher Sharkey Associate Director, Public
Relations +1 908 882 2310
christopher.sharkey@ambest.com
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1638 richard.attanasio@ambest.com
Al Slavin Senior Public Relations Specialist +1
908 882 2318 al.slavin@ambest.com