OLDWICK, N.J.-AM Best has placed under review with negative implications the Financial Strength Rating of A- (Excellent) and the Long-Term Issuer Credit Ratings of “a-” (Excellent) of Oregon Mutual Insurance Company and Western Protectors Insurance Company, which are domiciled in McMinnville, OR and collectively referred to as Oregon Mutual Group.
These Credit Ratings (ratings) have been placed under review with negative implications following Oregon Mutual Group’s significant surplus erosion through the first half of 2024. The loss of capital negatively impacted the group’s risk-adjusted capitalization as measured by Best’s Capital Adequacy Ratio (BCAR) placing material pressure on its overall balance sheet strength assessment. The group is actively pursuing capital solutions, which include, but are not limited to a reinsurance agreement and a material capital infusion. The expectation is that these actions will be completed and will improve risk-adjusted capitalization in the near term.
The decline in surplus through the first half of 2024, was driven by underwriting losses stemming from adverse loss reserve development, inclusive of personal lines business, which the group has exited. The ratings will remain under review with negative implications while AM Best monitors the status of these initiatives and fully reviews the impact once completed. If Oregon Mutual Group is unable to execute on these transactions as communicated and within the expected timeframe a downgrading of the ratings is likely. In addition, pressure remains on the organization’s business profile assessment. While the overall scope of Oregon Mutual Group was strategically reduced with the aforementioned personal lines exit, refinement to the risk portfolio has yet to demonstrate meaningful improvement and challenges remain.
This press release relates to Credit Ratings that have been published on AM Best’s website. For all rating information relating 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 regarding the use and limitations of Credit Rating opinions, please view Guide to Best’s Credit Ratings. For information on the proper use of Best’s Credit Ratings, Best’s Performance Assessments, Best’s Preliminary Credit Assessments and AM Best press releases, please view Guide to Proper Use of Best’s Ratings & Assessments.
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Contacts
Daniel Mangano, CPCU
Senior Financial Analyst
+1 908 882 1907
daniel.mangano@ambest.com
Christopher Draghi, CPCU, ARe
Director
+1 908 882 1749
chris.draghi@ambest.com
Christopher Sharkey
Associate Director, Public Relations
+1 908 882 2310
christopher.sharkey@ambest.com
Al Slavin
Senior Public Relations Specialist
+1 908 882 2318
al.slavin@ambest.com
