Best Raises Meadowbrook Rating
NU Online News Service, June 26, 2:54 p.m. EST?Southfield, Mich.-based Meadowbrook Insurance Group operations are showing improvement, according to the A.M. Best Company, which upgraded the firm today from "B-plus" to "B".
The Oldwick, N.J.-based rating agency also assigned a positive outlook to the rating, which applies to the four members of Meadowbrook Insurance Group: Star Insurance Company; Savers Property and Casualty Insurance Company; Williamsburg National Insurance Company; and Ameritrust Insurance Corporation.
In its announcement, Best said the rating action reflects the improved capitalization of the operating subsidiaries.
It also reflects reduced holding company financial leverage at Meadowbrook Insurance Group Inc., following the successful completion of an offering of newly-issued common stock raising $60.3 million, Best said.
Reacting to the upgrade in a statement, Robert S. Cubbin, president and chief executive officer of Meadowbrook, said, "We anticipate that this upgrade will have a positive effect on our existing business, allowing us to continue providing agents with a stable market and clients with excellent service. This should also enable us to grow by selecting from a limited number of high quality new business opportunities."
Explaining the upgrade, Best also noted that Meadowbrook has reported improved earnings in each of the last three quarters, following the implementation of corrective actions to stabilize reserve development and return the group to profitability.
Best noted company corrective actions that included positioning the group's loss reserves nearer the high-end of the actuarial ranges and discontinuing select program business that had accounted for a disproportionately large share of incurred losses.
In addition, Best highlighted Meadowbrook's strong market position as a provider of risk management services to business associations, affinity groups and individual businesses.
The rating agency added that the group is benefiting from improved market conditions and reduced competition as several players in this arena have recently exited the market, either voluntarily or involuntarily.
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