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A.M. Best Revises Outlooks to Stable for Millers Capital Insurance Company
[November 22, 2017]

A.M. Best Revises Outlooks to Stable for Millers Capital Insurance Company


A.M. Best has revised the outlooks to stable from negative and affirmed the Financial Strength Rating of A- (Excellent) and the Long-Term Issuer Credit Rating of "a-" of Millers Capital Insurance Company (Millers) (Harrisburg, PA).

The stable outlooks are based on Millers' improved operating performance in recent years, and A.M. Best's expectation that management's underwriting initiatives and improved enterprise risk management (ERM) capabilities will continue to favorably impact operating performance and strengthen overall capitalization.

The Credit Rating (rating) affirmations reflect Millers' very strong balance sheet strength, improved operating results in recent years, and appropriate ERM for the company's size and risk profile. Partially offsetting these positive rating factors are volatile historical operating performance trends and limited business profile.

A positive rating factor is Millers' very strong balance sheet, which is supported by its conservative reserve position and solid liquidity levels due to its high quality assets. Improved operating results in recent years have been driven by several rating factors including below-average catastrophe loss experience, underwriting, and pricing initiatives and ongoing exposure management efforts. Also, the company recently has adopted a formalized ERM process that has enhanced its risk awareness and risk culture.

A negative rating factor is Millers' limited business profile reflective of its product line and geographic risk concentration. The commercial multi-peril line reflects more than 90% of direct premiums written, mostly in Pensylvania. Volatility in prior year results was mainly due to weather-related events and inadequate pricing. Also, the company maintains an expense disadvantage when compared with the commercial property composite as reflected by its elevated five-year average underwriting expense ratio largely due to its high commission expense. At higher return periods, Millers retains catastrophe risk, which is factored into the overall balance sheet assessment. Lastly, as a predominate Pennsylvania commercial lines writer, Millers remains somewhat exposed to competitive market conditions, changes in the regulatory environment and judicial decisions.



This press release relates to Credit Ratings that have been published on A.M. 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 A.M. Best's Recent Rating Activity web page. For additional information regarding the use and limitations of Credit Rating opinions, please view Understanding Best's Credit Ratings. For information on the proper media use of Best's Credit Ratings and A.M. Best press releases, please view Guide for Media - Proper Use of Best's Credit Ratings and A.M. Best Rating Action Press Releases.

A.M. Best is the world's oldest and most authoritative insurance rating and information source. For more information, visit www.ambest.com.


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