These rating actions take into consideration MIGI’s fourth quarter and full year 2013 earnings announcement, which resulted in a net operating loss of
While leverage and risk-adjusted capitalization remain adequate for the current rating levels and is not a significant rating concern at this time,
For the full year 2013, MIGI reported adverse reserve development of
The negative outlook continues to reflect A.M. Best’s ongoing concerns regarding MIGI’s overall reserve adequacy and the potential for future adverse development, especially given the ongoing development on legacy business and the recent development on some of MIGI’s more recent books of business. While the charges recorded during the fourth quarter were not significant given the overall level of reserves, it is another quarter of negative news. In addition, the recent adverse development on MIGI’s excess and surplus lines business further erodes confidence that management has successfully walled off adverse reserve development on a going-forward basis.
Positive rating actions for MIGI are unlikely in the near to medium term. Key factors that could result in further negative rating actions include any additional adverse development in its reserves, prolonged unprofitable underwriting and operating results, a significant or sustained decline in its risk-adjusted capitalization and/or deterioration in its financial strength.
The FSR of B++ (Good) has been affirmed and the ICRs downgraded from “bbb+” to “bbb” for the following subsidiaries of Meadowbrook Insurance Group, Inc.:
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.
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Senior Manager, Public Relations
Assistant Vice President
Assistant Vice President, Public Relations