A.M. Best Revises Outlook to Negative and Affirms Ratings of Michigan Millers Mutual Insurance Company.OLDWICK, N.J. -- A.M. Best Co. has revised the outlook to negative from stable and affirmed the financial strength rating of A- (Excellent) and issuer credit rating of "a-" of Michigan Millers Mutual Insurance Company (Michigan Millers) (Lansing, MI). These rating actions reflect Michigan Millers' strong risk-adjusted capitalization, historical operating performance, niche market A niche market also known as a target market is a focused, targetable portion (subset) of a market sector. By definition, then, a business that focuses on a niche market is addressing a need for a product or service that is not being addressed by mainstream providers. expertise and management's actions to improve future underwriting Underwriting 1. The process by which investment bankers raise investment capital from investors on behalf of corporations and governments that are issuing securities (both equity and debt). 2. The process of issuing insurance policies. results. Offsetting these positive rating factors are the company's weak underwriting results posted since 2007, the drop in its risk-adjusted capitalization during 2008 and the execution risk associated with management's various initiatives to return the company to a profitable footing. Furthermore, results remain exposed to both weather-related losses and the weak economic conditions in its primary operating state, Michigan. Although risk-adjusted capitalization, as measured by Best's Capital Adequacy Ratio Capital adequacy ratio (CAR), also called Capital to Risk (Weighted) Assets Ratio (CRAR)[], is a ratio of a bank's capital to its risk. National regulators track a bank's CAR to ensure that it can absorb a reasonable amount of loss. (BCAR BCAR Brunswick County Association of Realtors BCAR British Civil Airworthiness Requirements BCAR Bullitt County Animal Rescue (Shepherdsville, KY) BCAR Business Case Analysis Report BCAR Beaver Creek Array BCAR Buffalo Civic Auto Ramps, Inc. ), significantly deteriorated in 2008 due to underwriting and investment losses, it continues to support Michigan Millers' current rating level. Management is committed to returning the company to underwriting profitability through tighter pricing and underwriting strategies with a focus on more profitable business segments. Michigan Millers' writes various property/casualty insurance products mainly across the Midwest, New York New York, state, United States New York, Middle Atlantic state of the United States. It is bordered by Vermont, Massachusetts, Connecticut, and the Atlantic Ocean (E), New Jersey and Pennsylvania (S), Lakes Erie and Ontario and the Canadian province of and (to a lesser degree) the Southwest. Michigan Millers' operations are organized into two segments: general business and agribusiness agribusiness Agriculture operated by business; specifically, that part of a modern national economy devoted to the production, processing, and distribution of food and fibre products and byproducts. , with general business including both commercial and personal lines. For Best's Ratings Best's rating A rating A.M. Best Co. assigns to insurance companies based on the company's ability to meet its obligations to its policyholders. , an overview of the rating process and rating methodologies, please visit www.ambest.com/ratings. Founded in 1899, A.M. Best Company is a global full-service credit rating organization dedicated to serving the financial and health care service industries, including insurance companies, banks, hospitals and health care system providers. For more information, visit www.ambest.com. |
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