AM Best has upgraded the Financial Strength Rating to A- (Excellent) from B++ (Good) and the Long-Term Issuer Credit Rating to “a-” (Excellent) from “bbb+” (Good) of CAMICO Mutual Insurance Company (CAMICO) (San Mateo, CA). The outlook of these Credit Ratings (ratings) has been revised to stable from positive.

The ratings reflect CAMICO’s balance sheet strength, which AM Best assesses as very strong, as well as its adequate operating performance, limited business profile and appropriate enterprise risk management (ERM).

The rating upgrades reflect an improvement in the balance sheet strength assessment to the higher end of the very strong category. CAMICO maintains the strongest level of risk-adjusted capitalization, as measured by Best’s Capital Adequacy Ratio (BCAR). The company has reported surplus growth over the most recent five-year period, despite ongoing partial surplus note principal repayments. These trends have persisted through the first quarter of 2024. Underwriting leverage metrics are low and compare favorably with AM Best’s commercial casualty composite average. Loss reserve development has become much more consistent, with favorable development in recent years.

CAMICO’s operating performance has been adequate and the primary driver of surplus growth. The company’s operating performance in recent years reflects solid underwriting results that have benefited from corrective actions taken by management in earlier years, including shifting the insured base toward small lower-risk firms amongst other underwriting and pricing actions. The limited business profile assessment primarily reflects product and geographic concentration risks due to CAMICO’s niche focus on writing professional liability and employment practices liability insurance coverages for small accounting firms, with slightly less than half of direct premiums written in California as of year end 2023. An appropriate ERM program is in place, with well-identified key risks and corresponding mitigation strategies.

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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