AM Best Downgrades Issuer Credit Rating of Cameron Mutual Insurance Company

OLDWICK, NJ–(BUSINESS WIRE)–am the best has downgraded the Long-Term Issuer Credit Rating (Long-Term ICR) from bb+ (fair) to bb (fair) and the Financial Strength Rating (FSR) from Cameron Mutual Insurance Company (Cameron Auf reciprocity) (Cameron, MO). The FSR outlook has been changed to negative from stable, while the long-term ICR outlook is negative.

The credit ratings reflect Cameron Mutual’s balance sheet strength, which AM Best considers reasonable, its marginal operating performance, limited business profile and marginal enterprise risk management (ERM).

The long-term ICR downgrade reflects the ongoing excess erosion that has weakened Cameron Mutual’s overall balance sheet strength. Severe weather events in 2022 resulted in a capital decline of $6.4 million in the first six months. In addition, the decrease in excess impacted the level of risk-adjusted capitalization, as measured by Best’s capital adequacy ratio (BCAR), which is rated as strong, from very strong at the last review. The long-term ICR downgrade also takes into account underwriting leverage ratios well above the standard personal and homeowner composite. The negative outlook reflects the continued deterioration in the company’s overall balance sheet strength and ongoing unfavorable operating results. Marginal operating performance continues to erode Cameron Mutual’s capital position and creates greater sensitivity to risk-adjusted capitalization as measured by BCAR. As management continues to refine the business profile to reduce risk and correct performance, risk mitigation strategies have yet to become significant.

Cameron Mutual underwrites personal automobile, commercial multi-pyril, farm and homeowners in three states, primarily in Missouri. Management has recently emphasized de-risking the portfolio as it relates to the more volatile segments of the business book, as well as improving valuation algorithms with more granularity and driving rate hikes where necessary.

Read  Best Stainless Steel Cookware Sets of 2022

This press release relates to ratings published on AM Best’s website. All ratings information relating to the press release and relevant disclosures, including details of the issuing authority for each rating referenced in this press release, can be found at AM Best Last review activity site. For more information on the use and limitations of rating opinions, see Best Credit Ratings Guide. Information on the proper use of Best’s credit ratings, Best’s performance reviews, Best’s preliminary credit rating and AM Best’s press releases can be found here Guide to Proper Use of Best’s Ratings & Assessments.

AM Best is a global rating agency, news publisher and data analytics provider specializing in the insurance industry. Headquartered in the United States, the company operates in over 100 countries with regional offices in London, Amsterdam, Dubai, Hong Kong, Singapore and Mexico City. For more information visit www.ambest.com.

Copyright © 2022 by AM Best Rating Services, Inc. and/or its affiliates. ALL RIGHTS RESERVED.

Leave a Comment

Your email address will not be published.