AM Best Modernizes Medical Mutual Insurance Co. from Maine

AM Best upgraded the long-term issuer credit rating to ‘a+’ (Excellent) from ‘a’ (Excellent) and affirmed Medical Mutual Insurance Co’s financial strength rating of A (Excellent). of Maine (MMIC). The outlook for these credit ratings (ratings) is stable.

AM Best said the ratings reflect the strength of the Portland-based insurer’s balance sheet, which its analysts rate as the strongest, as well as its strong operating performance, limited business profile and adequate enterprise risk management (ERM).

AM Best credited the rating actions to MMIC’s “disciplined underwriting strategy” which has led to profitable underwriting revenues in recent years despite challenging market conditions. In addition, a decrease in the size of the favorable development of MMIC reserves in the previous accident years led to a constant organic increase in the surplus.

AM Best said MMIC’s balance sheet strength also benefited from “strong liquidity measures and favorable leverage during this time”. As a result, the company’s balance sheet strength outperformed AM Best’s composite medical professional liability (MPL) performance.

In addition, the ratings reflect the cycle management programs and review processes in place to reduce volatility should the MPL market deteriorate in key MMIC jurisdictions.

AM Best said these positive rating factors are partially offset by the inherent market risks associated with the MPL sector as they relate to price competition, loss cost trends, regulatory challenges and changes in the overall US healthcare system.

The stable outlook is based on AM Best’s expectation that the company’s rating fundamentals for balance sheet strength, operating performance, business profile and ERM will be maintained over the medium term.

Medical Mutual provides medical professional liability insurance to physicians, hospitals, nursing homes and allied health facilities in Maine, New Hampshire, Vermont and Massachusetts. The company provides all specialties. Today, Medical Mutual insures 38 hospitals and nearly 3,700 doctors.

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