Press Release - JUNE 16, 2017
A.M. Best Upgrades Credit Ratings of Members of Wisconsin Reinsurance Group
| ||Kevin Dorsey |
Senior Financial Analyst
+1 908 439 2200, ext. 5401
+1 908 439 2200, ext. 5125
Manager, Public Relations
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Director, Public Relations
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FOR IMMEDIATE RELEASE
OLDWICK - JUNE 16, 2017
A.M. Best has upgraded the Financial Strength Rating to B++ (Good) from B+ (Good) and the Long-Term Issuer Credit Ratings to “bbb” from “bbb-” of Wisconsin Reinsurance Corporation and its wholly owned subsidiary, 1st Auto & Casualty Insurance Company (1st Auto), collectively known as Wisconsin Reinsurance Group (WRG). All companies are domiciled in Madison, WI. The outlook of these Credit Ratings (ratings) has been revised to stable from positive.
The rating upgrades reflect WRG’s improved overall risk-adjusted capitalization, positive overall underwriting and pre-tax operating performance over the past five-year period, reduced net underwriting leverage and long-standing relationships with its township mutual clients. Strong overall earnings reflect underwriting profitability in four of the past five years, augmented by a steady stream of net investment income and realized and unrealized capital gains.
Partially offsetting these positive rating factors are the group’s concentration of township mutual clients located in the Upper Midwest and persistent operating losses from its affiliate, 1st Auto. These losses have negatively impacted overall group results. The group’s geographic concentration in the Upper Midwest exposes its assumed business from reinsured clients to significant wind and hail loss events, New Madrid earthquake exposure, and the potential for adverse judicial, legislative and regulatory actions. However, mitigating this risk is the group’s comprehensive reinsurance program, which includes a catastrophe aggregate cover that has reduced its gross and net probable maximum loss to a lower percentage of policyholders’ surplus. Further, over the past five years management has increased its spread of risk by contracting with mutuals in four states outside of Wisconsin
WRG’s reinsured clients also are its owners, which fosters a close working relationship allowing the group to achieve excellent business persistency. The ratings reflect the consolidated operating performance and risk-adjusted capitalization of Wisconsin Reinsurance Corporation and its wholly owned subsidiary, 1st Auto.
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.
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