AM Best has revised the outlooks to negative from stable for Allegany Co-op Insurance Co., in Cuba, New York, and Conemaugh Valley Mutual Insurance Co. in Johnstown, Pennsylvania. These companies are collectively referred to as Allegany-Conemaugh Group.
At the same time, the ratings agency also affirmed the companies’ Financial Strength Rating of A (Excellent) and the Long-Term Issuer Credit Ratings of “a” (Excellent).
AM Best said the revised outlooks are a result of Allegany-Conemaugh’s key operating performance metrics, “which have begun to shift out of alignment with the strong assessment.” In 2022, for the second time in the most recent five-year period, the group posted an underwriting loss and a combined ratio above breakeven, AM Best said.
According to the report, unfavorable results have continued through March 31, 2023, and have been predominately driven by an increase in claims frequency and severity due to inflation and supply chain impacts, weather-related events and increased fire losses.
AM Best said the credit ratings reflect Allegany-Conemaugh’s balance sheet strength, which AM Best assesses as very strong, as well as its strong operating performance, limited business profile and appropriate enterprise risk management.
Management continues to work on improvements in underwriting and pricing, AM Best added. However, in the absence of improvements, the ratings may be downgraded, the ratings agency warned..
Topics AM Best
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