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A.M. Best Revises Issuer Credit Rating Outlook to Negative for McMillan-Warner Mutual Insurance CompanyOLDWICK, N.J. --(Business Wire)-- A.M. Best has revised the outlook to negative from stable and affirmed the issuer credit rating (ICR) of "bbb+"of McMillan-Warner Mutual Insurance Company (McMillan-Warner) (Marshfield, WI). Concurrently, A.M. Best has affirmed the financial strength rating (FSR) of B++ (Good). The outlook for the FSR is stable. The revised outlook for McMillan-Warner's ICR reflects continuing operating losses that have resulted in a decline in its policyholders' surplus. Underwriting losses were primarily attributable to an unusual number of severe losses throughout the company's geographic footprint. Despite the decline in policyholders' surplus, McMillan-Warner continues to maintain adequate risk-adjusted capitalization based on its favorable underwriting leverage, which supports its ratings. The company's capitalization acknowledges its favorable loss reserve development. Future negative rating actions could occur if McMillan-Warner does not substantially meet its near term operating projections or there is continued deterioration in policyholders' surplus, as well as deterioration in risk-adjusted capitalization as measured by Best's Capital Adequacy Ratio (BCAR). Future positive rating actions and a revision of the outlook could occur if the company reaches profitable operating performance in the near term and sustains it over several periods with increasing capital strength as measured by BCAR. The methodology used in determining these ratings is Best's Credit Rating Methodology, which provides a comprehensive explanation of A.M. Best's rating process and contains the different rating criteria employed in the rating process. Best's Credit Rating Methodology can be found at www.ambest.com/ratings/methodology. Key insurance criteria reports utilized: • Catastrophe Analysis in A.M. Best Ratings • Risk Management and the Rating Process for Insurance Companies • Understanding BCAR for Property/Casualty Insurers A.M. Best Company is the world's oldest and most authoritative insurance rating and information source. For more information, visit www.ambest.com. Copyright © 2014 by A.M. Best Company, Inc. ALL RIGHTS RESERVED.
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