08/27/2024 | Press release | Distributed by Public on 08/27/2024 09:06
AUGUST 27, 2024 11:01 AM (EDT)
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FOR IMMEDIATE RELEASE
OLDWICK - AUGUST 27, 2024 11:01 AM (EDT)
AM Best has revised the outlooks to negative from stable and affirmed the Financial Strength Rating of B+ (Good) and the Long-Term Issuer Credit Rating of "bbb-" (Good) of Buckeye State Mutual Insurance Company and its affiliate, Home and Farm Insurance Company. Both companies are domiciled in Piqua, OH and are referred to as Buckeye.
The Credit Ratings (ratings) reflect Buckeye's balance sheet strength, which AM Best assesses as strong, as well as its marginal operating performance, limited business profile and marginal enterprise risk management.
Buckeye's revised outlooks to negative from stable reflect a trend of underwriting losses driven by fire and weather events, which have contributed to three straight years of surplus deterioration and a corresponding decline in overall risk-adjusted capitalization. This trend has continued through the first half of 2024, and as such, underwriting leverage metrics have deteriorated and begun to compare unfavorably to the composite.
Buckeye's management team has implemented initiatives to improve profitability, which include aggressive rate increases, limitations on new business, tightened underwriting standards, increased deductibles and proactive agency management. While Buckeye has undertaken these initiatives to improve its capital position and underwriting performance, negative rating action could occur following a continued decline in risk-adjusted capitalization or a return to adverse reserve development that weakens overall balance sheet strength.
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.
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 does business in over 100 countries with regional offices in London, Amsterdam, Dubai, Hong Kong, Singapore and Mexico City.