AM Best downgrades Cameron Mutual Insurance Company’s issuer credit rating | Business Insurance

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OLDWICK, New Jersey–(COMMERCIAL WIRE)–I am better has downgraded the Long-Term Issuer Credit Rating (Long-Term ICR) to “bb” (Fair) from “bb+” (Fair) and affirmed Cameron Mutual Insurance’s Financial Strength Rating (FSR) of B (Fair) Company (Cameron Mutual) (Cameron, MO). The FSR outlook has been revised to negative from stable, while the long-term ICR outlook is negative.

The credit ratings (ratings) reflect Cameron Mutual’s balance sheet strength, which AM Best assesses as adequate, as well as its marginal operating performance, limited business profile and marginal enterprise risk management (ERM).

The long-term ICR downgrade reflects the continued erosion of the surplus, which has weakened the strength of Cameron Mutual’s balance sheet. Severe weather events in 2022 drove the $6.4 million decline in principal during the first six months. In addition, the decline in surplus influenced the level of risk-adjusted capitalization, as measured by Best’s Capital Adequacy Ratio (BCAR), which is assessed as strong, from very strong in the last review. The long-term ICR downgrade further considers underwriting leverage metrics that are well above the standard composite of private passenger cars and homeowners. The negative outlook reflects the continued deterioration of the company’s balance sheet strength and consistently unfavorable operating results. Marginal operating performance continues to erode Cameron Mutual’s capital position, creating greater sensitivity in risk-adjusted capitalization, as measured by BCAR. Additionally, while management continues to refine the business profile in an effort to reduce exposures and correct performance, risk mitigation strategies have yet to gain traction.

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Cameron Mutual writes personal autos, commercial multi-perils, farm owners and home owners in three states, primarily Missouri. Management has recently placed an emphasis on reducing portfolio risk as it relates to the more volatile segments of the business portfolio, as well as improving rating algorithms with more granularity and driving rate increases where necessary.

This news release relates to credit ratings that have been posted on AM Best’s website. For full rating information related to the release and pertinent disclosures, including details of the office responsible for issuing each of the individual ratings referenced in this release, please see AM Best’s Recent Rating Activity Web page. For additional information on the use and limitations of credit rating opinions, see Best Credit Score Guide. For information on the proper use of Best’s Credit Ratings, Best’s Performance Reviews, Best’s Preliminary Credit Reviews, and AM Best’s press releases, see Guide to the proper use of Best ratings and evaluations.

AM Best is a global credit rating agency, news publisher and data analytics provider specializing in the insurance industry. Headquartered in the United States, the company operates in more than 100 countries with regional offices in London, Amsterdam, Dubai, Hong Kong, Singapore and Mexico City. For more information visit www.ambest.com.

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