Outlooks Revised to Positive for Ohio’s Wayne Mutual Insurance

AM Best has revised the outlooks to positive from stable and affirmed the Financial Strength Rating of A- (Excellent) and the Long-Term Issuer Credit Rating of “a-” of Wooster, Ohio-based property/casualty insurer, Wayne Mutual Insurance Co. (Wayne Mutual).

The Credit Ratings (ratings) of Wayne Mutual reflect its balance sheet strength, which A.M. Best categorizes as very strong, strong operating performance, limited business profile and appropriate enterprise risk management.

The positive outlooks reflect the company’s improving balance sheet strength as demonstrated by consistent surplus growth that is driven by strong underwriting income and augmented by a steady stream of net investment and other income. As a result, surplus growth has been reported for five consecutive years with this trend continuing in 2018.

The company’s balance sheet is very strong with sound liquidity measures, favorable underwriting leverage ratios and historically redundant reserve development.

Partially offsetting these positive balance sheet factors is the company’s moderately elevated common stock leverage, which exposes policyholder surplus to stock market volatility. A continuation of these favorable balance sheet trends and characteristics could result in positive rating action in future rating cycles.

The company’s operating performance is strong as reflected by five-year average pre-tax and total returns on revenue and equity that compare favorably with the composite. In addition, the company’s five-year average combined and operating ratios outperform the composite.

As a single state writer in Ohio, the company is exposed to frequent and severe weather-related events, as well as judicial economic and regulatory concerns. As a result, its business profile is deemed limited.

However, the company adheres to a formalized comprehensive ERM program that identifies major risks to the organization while correlating mitigation strategies to offset these risks. In addition, the company maintains sufficient reinsurance to insulate policyholder surplus from frequent weather events and shock losses.

Wayne Mutual is part of the Wayne Insurance Group, which also includes Washington Mutual Insurance Association and Marion Mutual Insurance Association.

Topics Trends Ohio