AM Best has upgraded the Financial Strength Rating to A (Excellent) from A- (Excellent) and the Long-Term Issuer Credit Rating (Long-Term ICR) to “a” from “a-” of Minnesota Lawyers Mutual Insurance Company (Minneapolis, MN) and MLM Risk Retention Group, Inc. (Washington DC). These companies are collectively referred to as MLM Group. The outlook of these Credit Ratings (ratings) has been revised to stable from positive.
The ratings reflect MLM Group’s balance sheet strength, which AM Best categorizes as strongest, as well as its adequate operating performance, neutral business profile and appropriate enterprise risk management (ERM).
The upgrade of the Long-Term ICR reflects MLM Group’s improved operating performance, which resulted from implementing a number of initiatives designed to reduce underwriting volatility and improve rate adequacy. Underwriting performance has benefited from favorable reserve development and compares well with the composite and peer averages. MLM Group has maintained high policyholder retention levels despite strong competition due to its commitment to members of the legal profession, knowledge of the legal environment and the payment of policyholder dividends.
Balance sheet strength remains at the strongest level mostly due to conservative underwriting leverage measures and loss reserving practices, although policyholder surplus growth has been tempered by the payment of policyholder dividends. MLM Group’s business profile is neutral due to its good geographic spread of risk, as business is written in over 15 states; however, there is concentration of underwriting risk in the legal professional liability line of business. The group’s ERM is appropriate, as capabilities are in line with the moderate risk profile.
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