|[March 08, 2013]
A.M. Best Revises Outlook to Positive for Issuer Credit Rating of Medical Mutual Insurance Company of North Carolina
OLDWICK, N.J. --(Business Wire)--
A.M. Best Co. has revised the issuer credit rating (ICR) outlook
to positive from stable and affirmed the financial strength rating (FSR)
of A (Excellent) and ICR of "a" of Medical Mutual Insurance Company
of North Carolina (Medical Mutual). The outlook for the FSR is
Concurrently, A.M. Best has affirmed the FSR of A (Excellent) and ICR of
"a" of Medical Mutual's subsidiary, Medical Security Insurance Company
(Medical Security). The outlook for these ratings is stable. Both
companies are domiciled in Raleigh, NC.
The rating actions reflect Medical Mutual's excellent balance sheet
capitalization, long-term favorable operating performance and its
leadership position in its core markets. Additional factors supporting
the ICR's positive outlook include the company's history of underwriting
performance, historically favorable reserve development and its
dedication to loss prevention. Also supporting the revised outlook is
the breadth and depth of Medical Mutual's enterprise risk management
program. The ICR outlook also is based on A.M. Best's expectation of
continued excellent operating performance across multiple facts of
Partially offsetting these favorable rating factors are the inherent
risks to Medical Mutual being a medical professional liability carrier,
particularly as it relates to price competition, tort reform, loss cost
trends and regulatory challenges. Medical Mutual remains concentrated in
this highly cyclical market.
Issues that could lead to positive ratings actions for Medical Mutual
include continued strong operating earnings or growth in capitalization
levels. The ratings could be downgraded or the outlooks revised if the
company experienced upward shifts in claim frequency and severity
patterns or changes in the legislative and judicial environment.
The affirmation of the ratings of Medical Security is based on its
strong capitalization and favorable operating experience. An additional
factor supporting the company's ratings is the relationship between
Medical Security and Medical Mutual, which includes an excess of loss
The methodology used in determining these ratings is Best's Credit
Rating Methodology, which provides a comprehensive explanation of A.M.
Best's rating process and contains the different rating criteria
employed in the rating process. Key criteria utilized include: "Risk
Management and the Rating Process for Insurance Companies";
"Understanding BCAR for Property/Casualty Insurers"; and "Rating Members
of Insurance Groups." Best's Credit Rating Methodology can be found at www.ambest.com/ratings/methodology.
Founded in 1899, A.M. Best Company is the world's oldest and most
authoritative insurance rating and information source. For more
information, visit www.ambest.com.
Copyright © 2013 by A.M. Best Company, Inc. ALL RIGHTS
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