AM Best has revised the outlooks to stable from negative and affirmed the Financial Strength Rating of A (Excellent) and the Long-Term Issuer Credit Ratings of “a” (Excellent) of workers’ compensation specialist Maine Employers’ Mutual Insurance Co. in Portland, Maine and its wholly owned subsidiaries, MEMIC Indemnity Co. and MEMIC Casualty Co., both domiciled in Manchester, New Hampshire. All three companies collectively are referred to as MEMIC Group.
AM Best said the credit ratings reflect MEMIC Group’s balance sheet strength, which AM Best assesses as very strong, as well as its adequate operating performance, neutral business profile and appropriate enterprise risk management.
The revision of the outlooks to stable from negative reflects the group’s “demonstrated sustainability in improved operating results” that compare more favorably with AM Best’s workers’ compensation composite.
AM Best noted that the MEMIC Group implemented several initiatives aimed at achieving an underwriting profit across all entities and obtaining adequate pricing across the entire book of business. “These efforts have resulted in a significant reduction to the group’s combined ratio and 2023 marked its most profitable underwriting performance in 10 years,” AM Best said.
AM Best said the results have benefited from premium growth and reduction in policyholder dividends in 2022 and 2023. Additionally, MEMIC Group enjoyed “robust investment returns” in the past two years.
The rating agency said the group’s balance sheet strength is supported by the “strongest level” of risk-adjusted capitalization, as measured by Best Capital Adequacy Ratio (BCAR), which benefited from a recent reduction in a common stock leverage.
The surplus has been enhanced by positive operating results as well as the issuance of the long-term $30 million surplus note.
“The group is well-positioned for further premium growth and plans to sustain modest underwriting profitability over the next several years,” AM Best said.
MEMIC offers workers’ compensation coverage in 46 states and the District of Columbia. For 2022, the firm reported $401 million in written premium. The company will be holding its annual meeting on June 10.
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