A.M. Best Upgrades Ratings of Wisconsin’s Rural Mutual Insurance

June 12, 2018

A.M. Best has upgraded the Financial Strength Rating to A+ (Superior) from A (Excellent) and the Long-Term Issuer Credit Rating to “aa-” from “a+” of Rural Mutual Insurance Co. (Rural Mutual) in Madison, Wisconsin.

The outlook of these credit ratings has been revised to stable from positive.

These ratings reflect Rural Mutual’s balance sheet strength, which A.M. Best categorizes as strongest, as well as its strong operating performance, neutral business profile and appropriate enterprise risk management.

The rating upgrades reflect management’s disciplined underwriting strategy, which has produced strong underwriting results and multiple years of consistent policyholder surplus growth. Rural Mutual’s profitability has been driven by effective risk and exposure management, a conservative investment philosophy, strong local market knowledge and sound catastrophe reinsurance. As a result, the company’s five-year pre-tax and total returns on revenue and equity exceed the private passenger standard auto and homeowners composite averages.

In addition, the company’s five-year average combined and operating ratios also compare favorably with these composites, reflective of the company’s excellent loss and loss adjustment expense and underwriting expense ratios. Low underwriting expenses also compares favorably with the composite.

As a single state writer, the company is exposed to frequent and severe weather-related events, as well as judicial, regulatory and economic concerns. However, management has a proven track record of successful strong risk management practices and a market leadership position as an insurer of farm-related business in Wisconsin.

Source: A.M. Best