AM Best revises outlook to negative for Buckeye State Mutual of Ohio

AM Best revised the outlook to negative from stable and affirmed the financial strength rating of B+ (Good) and the long-term issuer credit rating of ‘bbb-‘ (Good) of Buckeye State Mutual Insurance Company and Affiliate his, Home and Farm Insurance Company. Both companies are based in Piqua, Ohio and are called Buckeye.

The credit ratings (ratings) reflect Buckeye’s balance sheet strength, which AM Best rates as strong, as well as marginal operating performance, limited business profile and marginal enterprise risk management.

Buckeye’s revised outlook to negative from stable reflects a trend of underwriting losses driven by fires and weather events, which have contributed to three consecutive years of surplus deterioration and a corresponding decline in global risk-adjusted capitalization. This trend continued in the first half of 2024 and as such the underwriting leverage parameters deteriorated and began to compare unfavorably with the composite.

AM Best said Buckeye’s management team has implemented initiatives to improve profitability, which include aggressive rate increases, new business caps, tightened underwriting standards, increased deductibles and proactive agency management.

While Buckeye has undertaken these initiatives to improve its capital position and underwriting performance, negative rating actions could occur from a continued decline in risk-adjusted capitalization or a return to negative reserve development that weakens strength general balance sheet.

Source: AM Best

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