The ratings of MACM are reflective of its strong risk-adjusted capitalization, its history of favorable operating performance and conservative loss reserve position. The company also benefits from its sustainable expense advantage and dominant position in providing medical professional liability (MPL) insurance within the
These positive rating factors are partially offset by the inherent market risks associated with being a single state, monoline MPL insurer, particularly as these risks relate to legislative (tort) reform, regulatory challenges and loss cost trends. MACM also exhibits elevated common stock leverage, increasing the potential for changes in surplus from volatility in the equity markets.
The company has benefited from its conservative approach in booking case reserves, which has contributed to MACM’s ability to continue its mission of providing a long-term stable market for physicians in
The outlook is based on A.M. Best’s expectation of continued solid capitalization and sustained strong operating profitability under the company’s relatively stable operating environment.
Positive rating actions are not anticipated in the midterm, as MACM’s capitalization, operating performance and business profile fully support its current ratings. However, the company’s ratings/outlook may be adversely impacted by the development of a trend of unprofitable underwriting, adverse loss reserve development, or a significant decline in risk-adjusted capitalization.
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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Managing Senior Financial Analyst
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