AM Best Places credit ratings of Oregon Mutual Group members under review

AM Best downgraded Oregon Mutual Insurance Co.’s financial strength rating of A- (Excellent) and long-term issuer credit rating of ‘a-‘ (Excellent). and Western Protectors Insurance Co., which are domiciled in McMinnville, Oregon and collectively referred to as Oregon Mutual Group.

Ratings were revised down with negative implications following the erosion of Oregon Mutual Group’s surplus in the first half of 2024.

“The loss of capital had a negative impact on the group’s risk-adjusted capitalisation, as measured by Best’s capital adequacy ratio (BCAR), putting significant pressure on the overall assessment of its balance sheet strength,” said AM Best. “The Group is actively pursuing capital solutions, including but not limited to a reinsurance arrangement and a material capital infusion. These actions are expected to be completed and improve risk-adjusted capitalization in the near term.”

The decline in surplus was driven by underwriting losses resulting from the negative development of loss reserves, including the personal lines business, which the group exited, according to AM Best.

AM Best said the ratings would remain under review with negative implications while the rating agency monitors the status of the initiatives and analyzes the impact once completed.

TOPICS
AM Best Oregon