AM Best Upgrades Credit Ratings for Members of Midwest Family Group

AM Best has upgraded the Financial Strength Rating to A (Excellent) from A- (Excellent) and the Long-Term Issuer Credit Rating to “a” from “a-” of Midwest Family Mutual Insurance Company and its wholly owned subsidiary, Midwest Family Advantage Insurance Company. Collectively, the companies are referred to as Midwest Family Group (Midwest Family) and operate under an inter-company quota share reinsurance agreement. The outlook of these Credit Ratings (ratings) has been revised to stable from positive. Both companies are domiciled in West Des Moines, IA.

The ratings of Midwest Family reflect the group’s balance sheet strength, which AM Best categorizes as very strong, as well as its strong operating performance, neutral business profile and appropriate enterprise risk management (ERM).

The rating upgrades reflect Midwest Family’s strong operating performance, driven by its consistently profitable underwriting results, competitive expense advantage and solid investment earnings. Underwriting results have outperformed the commercial casualty composite on a five- and 10-year basis. Over the past several years, the group’s operating performance has remained relatively consistent, with better-than average total return-on-equity metrics and low to moderate volatility.

Balance sheet strength is supported by the strongest level of risk-adjusted capitalization, as measured by Best’s Capital Adequacy Ratio (BCAR), and a high quality investment portfolio with solid liquidity, partially offset by above-average common stock leverage and adverse loss reserve development reported across several lines of business in 2020. The group’s neutral business profile reflects business that is fairly diverse across product lines and geographies, with improved diversification of risks in recent years from continued growth in non-Midwestern states. Midwest Family’s ERM framework and risk management capabilities are considered appropriate for the risk profile of the organization. The ERM program includes a strong risk awareness culture and corporate governance, which are supported by the Midwest Family’s board and senior management. The strength of the group’s ERM framework is further demonstrated by its quantifiable risk appetite and tolerance metrics with stress testing performed on top risks.

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 media use of Best’s Credit Ratings and AM Best press releases, please view Guide for Media - Proper Use of Best’s Credit Ratings and AM Best Rating Action Press Releases.

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. For more information, visit www.ambest.com.

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