AM Best has revised the outlook to negative from stable for the Long-Term Issuer Credit Rating (Long-Term ICR) and affirmed the Financial Strength Rating (FSR) of A (Excellent) and Long-Term ICR of a+ of Ophthalmic Mutual Insurance Company (A Risk Retention Group) (OMIC) (Burlington, VT). The outlook of the FSR remains stable.
The ratings reflect OMICs balance sheet strength, which AM Best categorizes as strongest, as well as its strong operating performance, neutral business profile and appropriate enterprise risk management.
The revised Long-Term ICR outlook reflects the reduction in underwriting and operating performance in 2017 and 2018 and the challenges that OMIC faces to improve results in the near term. Underwriting results in earlier years benefited from significant favorable development of prior accident year loss reserves, resulting in strong operating performance in those years. However, margins have compressed in recent years following the impacts of a rate decrease in 2016 and rising severity, as well as slight adverse development in 2017 and 2018, which placed the companys profitability more in line with its peers. However, we emphasize that despite the recent underwriting results, OMICs risk-adjusted capitalization remains at the strongest level.
This press release relates to Credit Ratings that have been published on AM Bests website. For all rating information relating to the release and pertinent disclosures, including details of the office responsible for issuing each of the individual ratings referenced in this release, please see AM Bests Recent Rating Activity web page. For additional information regarding the use and limitations of Credit Rating opinions, please view Understanding Bests Credit Ratings. For information on the proper media use of Bests Credit Ratings and AM Best press releases, please view Guide for Media – Proper Use of Bests Credit Ratings and AM Best Rating Action Press Releases.
AM Best is a global rating agency and information provider with a unique focus on the insurance industry. Visit www.ambest.com for more information.
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Edward J. Zonenberg
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Sharon Pereira Marks
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