Credit Ratings Assigned to Midwest Insurance Group by AM Best

AM Best has assigned a Financial Strength Rating of A- (Excellent) and Long-Term Issuer Credit Ratings of “a-” to Midwest Insurance Co. of Springfield, Illinois, and its affiliate, West River Insurance Co. in Sioux Falls, South Dakota, collectively known as Midwest Insurance Group (Midwest).

The outlook assigned to the ratings is stable.

The ratings reflect Midwest’s balance sheet strength, which AM Best categorizes as very strong, as well as its adequate operating performance, limited business profile and appropriate enterprise risk management.

Midwest’s risk-adjusted capitalization, as measured by Best’s Capital Adequacy Ratio (BCAR), is categorized as strongest, and AM Best expects it to remain at a similar level in future years. The balance sheet strength assessment also considers the company’s favorable reserve development over the past five years, further distancing itself from historical adverse reserve developments related to its California workers’ compensation book of business.

Midwest has generated an adequate level of operating performance, supported by favorable underwriting income and moderate investment returns in recent years. Underwriting results have benefited from favorable reserve development trends on prior accident years. Midwest is a direct writer of first dollar guaranteed cost coverage with approximately 20 state licenses.

As a monoline workers’ compensation insurer, its limited business profile leaves it susceptible to competitive pressures in certain jurisdictions, as well as potential legislative, regulatory or judicial changes. This concern is mitigated partly by the group’s strategy to ensure responsiveness to its local agency base. Risk-management capabilities are considered appropriate for the risk profile of the company.

Source: AM Best

Topics AM Best