CONTACTS:
FOR IMMEDIATE RELEASE
OLDWICK - APRIL 19, 2018 02:40 PM (EDT)
A.M. 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-” of Connecticut Medical Insurance Company (Glastonbury, CT) and its sponsored risk retention group company, CMIC Risk Retention Group (District of Columbia). These companies are collectively referred to as Connecticut Medical Insurance Group (the group).
These Credit Ratings (ratings) reflect the group’s balance sheet strength, which A.M. Best categorizes as strongest, as well as its adequate operating performance, limited business profile and appropriate enterprise risk management.
The revised outlooks reflect the negative trend in underwriting and operating performance and the challenges that the group faces to improve results in the near term given the ongoing competitive market conditions. Results have suffered in recent years due to an increase in severity as well as the emergence of adverse development on prior accident year loss reserves, which culminated in a $23.4 million underwriting loss in 2017. The group’s reserves historically developed very favorably, but have come under pressure in recent years as loss costs for the group have been increasing. In addition, a large reserve “one-time adjustment” was taken in order to recognize retro-dated features in the group’s modified claims made book of business, which had not been previously included in the third party actuarial consultant’s assumptions. Despite the strengthening, surplus increased $10 million from the previous year due to unrealized gains.
This press release relates to Credit Ratings that have been published on A.M. 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 A.M. 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 A.M. Best press releases, please view Guide for Media - Proper Use of Best’s Credit Ratings and A.M. Best Rating Action Press Releases.
A.M. Best is the world’s oldest and most authoritative insurance rating and information source.