OLDWICK, N.J., April 18, 2022–(BUSINESS WIRE)–AM Best has assigned a Financial Strength Rating of A- (Excellent) and a Long-Term Issuer Credit Rating of “a-” (Excellent) to Manufacturing Technology Mutual Insurance Company (MTM) (Novi, MI). The outlook assigned to these Credit Ratings (ratings) is stable.
The ratings reflect MTM’s balance sheet strength, which AM assesses as very strong, as well as its adequate operating performance, limited business profile and appropriate enterprise risk management.
MTM’s risk-adjusted capitalization, as measured by Best’s Capital Adequacy Ratio (BCAR), is assessed at the strongest level, where AM Best expects it to remain in future years. The balance sheet assessment also considers the company’s low reinsurance dependence and consistently favorable reserve development.
MTM has generated an adequate level of operating performance with most five-year operating results outperforming the workers’ compensation (WC) composite. The company’s operating results are distorted due to the significant policyholder dividends the company pays with dividends over the past five-years amounting to $22.9 million, which represented over 60% of the company’s policyholder surplus as of December 2021. However, these dividends support strong retention from MTM’s policyholders. MTM has limited business diversification as a mono-line WC insurer with geographic concentration and customer concentration. The company is licensed only in Michigan and underwrites primarily manufacturing entities, printing operations, hardware stores and automotive dealerships. This leaves the company susceptible to potential judicial, legislative or regulatory changes in the WC market in Michigan. MTM’s risk-management capabilities are considered appropriate for the company’s risk profile.
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 use of Best’s Credit Ratings, Best’s Performance Assessments, Best’s Preliminary Credit Assessments and AM Best press releases, please view Guide to Proper Use of Best’s Ratings & Assessments.
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.
Copyright © 2022 by A.M. Best Rating Services, Inc. and/or its affiliates. ALL RIGHTS RESERVED.
View source version on businesswire.com: https://www.businesswire.com/news/home/20220418005455/en/
Senior Financial Analyst
+1 908 439 2200, ext. 5547
Manager, Public Relations
+1 908 439 2200, ext. 5159
+1 908 439 2200, ext. 5892
+1 908 439 2200, ext. 5644