A.M. Best has revised the outlook to positive from stable and affirmed the financial strength rating of A- (Excellent) and the long-term issuer credit rating of “a-” of Minnesota Lawyers Mutual Insurance Company (MN) and MLM Risk Retention Group (MLM Group).
The ratings reflect MLM Group’s balance sheet strength, which A.M. Best categorises as strongest, as well as its marginal operating performance, neutral business profile and appropriate enterprise risk management (ERM).
The positive outlook reflects MLM Group’s improved operating performance resulting from the implementation of several initiatives designed to reduce underwriting volatility and improve rate adequacy.
MLM Group has maintained high policyholder retention levels despite strong competition due to its commitment to members of the legal profession, knowledge of the legal environment and the payment of policyholder dividends.
Risk-adjusted capitalisation remains strongest mostly due to conservative underwriting leverage measures and loss reserving practices, although policyholder surplus growth has been tempered by the payment of policyholder dividends.
MLM Group’s business profile is neutral due to its good geographic spread of risk, as the business is written in over fifteen states. However, there is a concentration of underwriting risk in the legal professional liability line of business. The group’s ERM is appropriate, as capabilities are in line with the moderate risk profile.