A.M. Best Revises Outlook to Negative for CEM Insurance Company.

OLDWICK, N.J. -- A.M. Best Co. has revised the outlook to negative from stable and affirmed the financial strength rating (FSR) of B+ (Good) and issuer credit rating of "bbb-" of CEM Insurance Company (CEM) (Deer Park, IL).

The revised outlook reflects that CEM's recent operating results have failed to meet A.M. Best's expectations, resulting in a strain on its risk-adjusted capitalization. The ratings reflect A.M. Best's expectation that CEM's risk-adjusted capital will be strengthened in the near term, the experience of its management team and the explicit support provided by its owner.

Offsetting factors are continued operating variability, which has caused fluctuations in CEM's capital position, its overall performance, which is below average compared to its peer group, its limited business profile and the uncertainty of ultimate loss development on the significant new business written by the company in recent years.

For Best's Ratings, 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.