Members of the Concord Group Insurance Pool are facing ratings downgrades from A.M. Best. The main reason: an “inconsistent” operating performance.
What that means is that pool members Concord General Mutual Insurance Co. of Concord, N.H.; Green Mountain Insurance Co. Inc. of Berlin, Vt.; State Mutual Insurance Co. of Auburn, Maine; Sunapee Mutual Fire Insurance Co. of Concord, N.H.; and Vermont Accident Insurance Co. Inc. of Berlin, Vt. saw their financial strength rating downgraded from an “A,” or excellent rating, to an “A-.”
Additionally, their issuer credit rating is now “a-,” down from “a.”
A.M. Best explains its actions stem from the Concord Group Insurance Pool’s operating performance, “which has been inconsistent and below the composite average.”
What’s more, A.M. Best said that unfavorable experience in its personal automobile lines has driven its underwriting losses and that weather-related losses have adversely affected its property coverage—both over the last five years.
A.M. Best was also critical of the pool’s geographic risk concentration as well as its elevated expense ratio, which was “higher than the composite average.” An elevated common stock leverage is also raising concern.
At the same time, A.M. Best noted as positive the pool’s adequate risk-adjusted capitalization, “well-established regional market presence” and business strategies implemented in recent years, including rate increases and growth focus on profitable lines. Another plus: the use of predictive modeling for pricing and risk selection.
A.M. Best also noted that the pool plans to grow in Massachusetts by offering commercial lines products there to help diversity geographically and in its lines of business.
A.M. Best said that its outlook for Concord Group Insurance Pool’s financial strength rating and issuer credit rating have been revised to stable from negative.
Source: A.M. Best