A.M. Best releases ratings on the companies of Motorists Insurance Group and BrickStreet Mutual Insurance Group

 In a release issued today, A.M. Best announced it has downgraded the financial strength rating of Motorists Insurance Group to A- (Excellent) from A (Excellent). The outlook for the rating has been revised from negative to stable. The A- (Excellent) rating of BrickStreet Mutual Insurance Group was affirmed at A- (Excellent) with a stable outlook.

A.M. Best stated its decision was based on Motorists’ geographic concentration, which exposes it to frequent weather-related losses in a limited number of its operating states. In addition, recent net underwriting results were negatively impacted by an increasing expense ratio, which compares unfavorably to the average for its composite group. Going forward, A.M. Best indicated they “expected positive impacts” from the Motorists affiliation with BrickStreet Insurance.

“Since affiliating with BrickStreet on April 24, Motorists Insurance Group consists of 16 companies supported by $1.6 billion of surplus. Our combined operations span 29 states, generating annual revenue of $1.1 billion and net income in excess of $75 million. We have never been stronger financially or better positioned strategically through combined operational synergies, improved risk diversification and expanded agency distribution,” Motorists Insurance Group and BrickStreet CEO David Kaufman said in a letter addressed to agents. “A.M. Best chose not to evaluate the combined group until all companies pool their underwriting results effective in 2018. At the same time, they referenced the positive implications of the recently closed affiliation on both organizations.”

In its announcement, A.M. Best recognized BrickStreet’s profitable underwriting and operating performance and its prudent loss reserving standards. It also recognized Motorists’ focused operating strategy and strategic initiatives, which have produced positive operating earnings in the last four years, along with its extensive product knowledge, diversified product offerings and long-standing regional market presence.

“The affiliation of our two well-positioned organizations will create a super-regional carrier poised for success as both leverage strong agency partnerships built on outstanding field support, customer-responsive claims service and a rapidly developing technology platform,” Kaufman said.

“Our agents and policyholders recognize they are protected by the combined financial strength and strategic capabilities of all companies in the group,” Motorists Insurance Group and BrickStreet President TJ Obrokta said. “As we integrate operations, the expense ratio and weather-related concerns expressed by A.M. Best will be addressed. We are confident our combined operating results will align with our new peer group and eventually be reflected in the A.M. Best rating.”