AM Best affirms ratings of Mutual Insurance Company of Arizona
September 21, 2021
Mutual Insurance Company of Arizona (MICA) announced yesterday that AM Best affirmed its Financial Strength Rating (FSR) of A (Excellent) with a stable outlook. AM Best also affirmed the FSR rating of the MICA Risk Retention Group, Inc., as A (Excellent), also with a stable outlook.
“As a mutual insurance company, MICA is committed to providing value to our owners,” said MICA CEO James Carland, MD. “In periods of change and uncertainty, our physicians, physician groups and other insureds can remain confident in having a medical professional liability insurer with MICA’s financial strength, resources and mission-driven focus.”
In its rating report, AM Best acknowledged MICA’s financial status as the strongest level of risk-adjusted capitalization, as measured by Best’s Capital Adequacy Ratio. Best also recognized MICA’s longterm history of organic surplus growth — despite significant policyholder dividends paid out annually over the last five years.
MICA’s operating performance remained strong with return metrics and operating ratios that outperform the medical professional liability composite and the overall property/casualty industry over the prior five-year period.
AM Best Removes Under Review with Developing Implications, Affirms Credit Ratings of NORCAL Group’s Members
September 10, 2021
AM Best has removed the under review with developing implications and affirmed the Financial Strength Rating (FSR) of A- (Excellent) and the Long-Term Issuer Credit Ratings (Long-Term ICR) of “a-” (Excellent) for the members of NORCAL Group (NORCAL). The outlook of these Credit Ratings (ratings) is stable. (See below for a detailed listing of the companies.)
The ratings reflect NORCAL’s balance sheet strength, which AM Best assesses as very strong, as well as its marginal operating performance, neutral business profile and appropriate enterprise risk management (ERM). The ratings also reflect rating enhancement provided by the ProAssurance Group.
The ratings receive support from the group’s relationship with its new ultimate parent, ProAssurance Corporation, which acquired NORCAL on May 5, 2021, as part of a sponsored demutualization. Rating enhancement provided to NORCAL reflects the integration of the company into the ProAssurance organization and the operational and expense synergies to be realized, as well as explicit support from a Parental Guaranty provided by ProAssurance for the $191 million of converted contribution certificates upon NORCAL’s demutualization, should NORCAL be unable to pay principal and interest at maturity.
Despite capitalization at the strongest level, as measured by Best’s Capital Adequacy Ratio (BCAR), balance sheet strength is at the low level of a very strong assessment when considering the continued decline in surplus and additional reserve charges from older accident years. Operating performance has been assessed at marginal as the group has underperformed the medical professional liability (MPL) composite, on average, during the prior five-year period and into the second quarter of 2021. Underwriting losses reflect reserve deterioration following changes to reserving protocol, which led to higher loss severities compared with historical patterns. Additional unfavorable reserve development is expected to continue in the near term.
The stable outlooks reflect the expectation that NORCAL’s rating fundamentals will remain unchanged over the intermediate term. Risk-adjusted capitalization is expected to remain supportive while ongoing strategic initiatives implemented by ProAssurance are expected to stabilize operating performance and strengthen the group’s ERM.
The FSR of A- (Excellent) and the Long-Term ICRs of “a-” (Excellent) have been removed from under review with developing implications and affirmed with assigned outlooks of stable for the following members of NORCAL Group:
· NORCAL Insurance Company
· NORCAL Specialty Insurance Company
· Medicus Insurance Company
· FD Insurance Company
· Preferred Physicians Medical Risk Retention Group, a Mutual Insurance Company
ProAssurance Declares Quarterly Dividend
September 8, 2021
The Board of Directors of ProAssurance Corp. has declared a cash dividend of $0.05 per common share, payable on Oct. 8, 2021, to shareholders who own our stock as of September 24, 2021.
The ProAssurance dividend policy anticipates a total annual dividend of $0.20 per share, to be paid in equal quarterly installments. However, any decision to pay future cash dividends will be subject to the Board’s final determination after a comprehensive review of the company’s financial performance, future expectations and other factors deemed relevant by the Board.