AM Best Affirms the Credit Ratings of MLMIC Insurance Company
December 17, 2019by
AM Best has affirmed the Financial Strength Rating (FSR) of A+ (Superior) and the Long-Term Issuer Credit Ratings (Long-Term ICR) of “aa-” of MLMIC Insurance Company (MLMIC) (New York, NY). The outlook of these Credit Ratings (ratings) is stable.
The ratings reflect MLMIC’s balance sheet strength, which AM Best categorizes as strongest, as well as its adequate operating performance, limited business profile and appropriate enterprise risk management. The ratings also benefit from the financial support provided by MLMIC’s direct parent company, National Indemnity Company, which is ultimately owned by Berkshire Hathaway Inc.
AM Best categorizes MLMIC’s risk-adjusted capitalization as strongest, as measured by Best’s Capital Adequacy Ratio (BCAR) and it’s expected it to remain at a similar level going forward. The balance sheet strength assessment also considers the company’s track record of positive reserve development, as well as the strong financial flexibility its publicly traded ultimate parent, Berkshire Hathaway Inc., can provide.
MLMIC has generated an adequate level of operating results historically, supported by modest underwriting profits and investment returns. Underwriting results have consistently benefited from reserve releases on prior accident years. Going forward, AM Best does not expect any material change in the company’s operating performance.
MLMIC’s insurance portfolio is concentrated in the medical malpractice line of business. The company underwrites risks only within New York state, which is one of the nation’s most challenging markets for medical professional liability. However, management has been able to operate successfully through underwriting cycles while maintaining MLMIC’s leading market position within New York. In addition, risk management capabilities have proven appropriate for the risk profile of the company.