Meadowbrook Group Upgraded

The financial strength rating of Meadowbrook Insurance Group of Southfield, Mich., was raised by A.M. Best Co. “B+” (Very Good) from “B” (Fair) and assigned a positive outlook. The rating applies to the four members of Meadowbrook Insurance Group, Star Insurance Co., Savers Property & Casualty Insurance Co., Williamsburg National Insurance Co. and Ameritrust Insurance Corp. The rating outlook is positive.

This rating action reflects the improved capitalization of the operating subsidiaries and the reduced holding company financial leverage at Meadowbrook Insurance Group Inc., following the successful completion of an offering of newly issued common stock raising net proceeds of $60.3 million.

In addition, Meadowbrook has reported improved earnings in each of the last three quarters, following the implementation of corrective actions to stabilize reserve development and return the group to profitability.

Meadowbrook Insurance Group maintains a strong market position as a provider of risk-management services to business associations, affinity groups and individual businesses. It is also benefiting from improved market conditions and reduced competition as several players in this arena have recently exited the market, either voluntarily or involuntarily.

The group has reported weak operating results and continued adverse loss
development experienced on both an accident- and calendar-year basis, which have diminished the group’s capital strength in recent years. But A.M. Best believes the recent improvements in the group’s financial and operating parameters represent a stabilization of the its financial condition.