Mutual Assurance’s Financial Strength Rating Affirmed as A+ (Superior) by A.M. Best Company
On February 27, 2015, A.M. Best Company affirmed the Mutual Assurance Society of Virginia’s Financial Strength Rating of A+ (Superior), with a negative rating outlook. This rating and outlook are unchanged from 2014. In our opinion, the negative rating outlook results primarily from underwriting losses associated with severe weather events impacting the Commonwealth of Virginia since 2003. These included Hurricanes Isabel (2003), Gaston (2004), Ernesto (2006), Ida (2009) and Irene (2011), as well as unusually severe tornados in 2011 and a derecho in 2012. Also contributing to the negative rating outlook is the Society’s long-term commitment to equity investments that results in cyclical volatility in investment performance.
Notwithstanding the effects of weather-related losses and cyclical investment volatility, the Society’s financial strength and stability remain undeniable. The Society has an extraordinary Capital Ratio (Surplus to Invested Assets) of 86% and a BCAR (Best Capital Adequacy Ratio) which is almost 3 times the expected BCAR for a company with an A+ rating. Now in its 221st year, the Society is one of only 60 property, and casualty insurance companies rated A or higher for over 75 years. Also, the Society has been assigned a Financial Stability Rating of A” (Unsurpassed) by Demotech, Inc.
Under the Society’s unique business model, it strives to charge its member policyholders the least amount necessary to support the operations of the Society, a concept that is contrary to all but the most altruistic organizations in existence today. Members and prospective members of the Society should feel secure with its A+ (Superior) Financial Strength Rating even with a negative rating outlook. The worst case outcome of a negative rating outlook would be a reduction in the Financial Strength Rating to A (Excellent), which would then likely result in a stable rating outlook.
Questions regarding the Society’s rating or rating outlook should be referred to Jeffrey S. Wrobel, Sr., CPCU, President, at 804-213-3669 or contact us