CMIC Group, a mutual medical professional liability insurance provider, was recently notified that A.M. Best has affirmed the Company’s financial strength rating of A- (Excellent), and the Long-Term Issuer Credit Ratings of “A-” of Connecticut Medical Insurance Company (CMIC) (Glastonbury, CT) and CMIC Risk Retention Group (District of Columbia). However, the outlook has been revised from stable to negative.
The revised outlook reflects the negative trend in underwriting performance and the challenges CMIC faces to improve results in the near term given the ongoing soft market conditions. Underwriting results have suffered in 2016 and 2017 due to increased severity following several years of consistently positive underwriting results and corresponding surplus growth. As well in 2017, CMIC booked a “one-time reserve adjustment” of $8 million to account for previously unidentified retro-dated coverage predominantly within the risk retention group’s modified claims-made book of business.
Despite the reserve strengthening, CMIC’s surplus increased by $10.0 million to $309.5 million as of Dec. 31, 2017, due primarily to unrealized gains. In terms of financial strength and stability, A.M. Best stated that the Company’s Balance Sheet has received the strongest level of risk-adjusted capitalization rating (BCAR). They also commented that CMIC’s investments are conservative and liquid, while underwriting leverage continues to remain low.
“Despite these recent developments, our company continues to be very strong financially and the Board of Directors, Management Team, and staff are working diligently to improve our financial performance during this difficult market cycle,” said Stephen J. Gallant, CEO of CMIC Group. “Likewise, we are reviewing our product offerings to ensure they continue to meet the evolving needs of the marketplace, and we appreciate the continued loyalty and support of our esteemed member physicians and valued distribution partners as we remain committed to the long-term success of the company.”