August 15, 2024 by matray

AM Best has upgraded the Long-Term Issuer Credit Rating to “a+” (Excellent) from “a” (Excellent) and affirmed the Financial Strength Rating of A (Excellent) of Medical Mutual Insurance Co. of Maine (MMIC). The outlook of these Credit Ratings (ratings) is stable.

The ratings reflect MMIC’s balance sheet strength, which AM Best assesses as strongest, as well as its strong operating performance, limited business profile and appropriate enterprise risk management (ERM).

These rating actions are the result of MMIC’s disciplined underwriting strategy, which has resulted in profitable underwriting income in recent years despite challenging market conditions. In addition, despite the decline in the magnitude of MMIC’s favorable reserve development on prior accident years, the company has achieved solid organic surplus growth. MMIC’s balance sheet strength also has benefited from strong liquidity measures and favorable leverage during this time. As a result, the company’s balance sheet strength has compared favorably to AM Best’s medical professional liability (MPL) composite. Furthermore, the ratings reflect the cycle management programs and review processes put into place to reduce volatility should the MPL market deteriorate in MMIC’s key jurisdictions. These positive rating factors are offset partially by the inherent market risks associated with the MPL sector as it relates to price competition, loss cost trends, regulatory challenges and changes in the overall U.S. healthcare system.

The stable outlooks are based on AM Best’s expectation that the company’s rating fundamentals for balance sheet strength, operating performance, business profile and ERM will be maintained over the medium term.