A.M. Best has revised the outlook to stable from negative and affirmed the financial strength rating of A- (Excellent) and the issuer credit rating of “a-” for Midwest Builders’ Casualty Mutual Insurance Co. (MWBC) and its subsidiaries, Horizon Midwest Casualty Co. (Horizon) and Bearing Midwest Casualty Co. (Bearing).
All companies are members of the Midwest Builders’ Casualty Group (Midwest Builders) and headquartered in Lenexa, Kan.
The ratings reflect Midwest Builders’ solid risk-adjusted capitalization, favorable underwriting leverage ratios and improved operating performance over the past three years. In addition, the group maintains aggressive claims management and favorable reserve development as reflected by consistent redundancies on both an accident- and calendar-year basis.
The group also benefits from being a specialized workers’ compensation insurer servicing the commercial construction industry.
Partially offsetting these positive rating factors are the group’s significant product concentration as a monoline workers’ compensation writer in a fairly concentrated marketplace and the challenges associated with new business expansion in several states and persistently low investment yields.
Further, adverse operating results in earlier years have dampened the group’s five year average pre-tax and total returns on revenue and equity, which lag the workers’ compensation composite.
These positive attributes enable the group to provide its loyal members with stable workers’ compensation rates. Based on its claim management expertise, it can establish reserves and reach adequate settlements shortly after receiving initial claim data.
To promote new business development, MWBC created the two wholly owned subsidiaries, Bearing and Horizon, in 2012, to provide rate flexibility based on policyholders’ loss experience.
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