OLDWICK, NJ, November 22, 2023–(BUSINESS WIRE)–AM Best has assigned a Financial Strength Rating (FSR) of A- (Excellent) and a Long-Term Issuer Credit Rating (Long-Term ICR) of “a-” (Excellent) to CM Select Insurance Company (CM Select) (Merrill, WI ), which is under new ownership. The outlook assigned to CM Select’s Credit Ratings (ratings) is stable. Concurrently, AM Best has withdrawn the FSR of A (Excellent) and the Long-Term ICR of “a” (Excellent) of CM Select Insurance Company (Merrill, WI); ratings that were influenced by CM Select’s prior ownership.
The assigned ratings reflect CM Select’s balance sheet strength, which AM Best assesses as very strong, as well as its adequate operating performance, limited business profile and appropriate enterprise risk management.
AM Best expects CM Select to maintain the strongest level of risk-adjusted capitalization, as measured by Best’s Capital Adequacy Ratio (BCAR), which supports prospective growth in the company’s underwriting risks. The company’s business plan consists of writing commercial products for small and medium businesses, including serving the religious and non-profit market, primarily business owner policies in Texas and various states, and expanding into minority and veteran-owned markets over the next five years. CM Select will continue to leverage Church Mutual Insurance Group’s (Church Mutual) agency force while expanding into adjacent markets. While the company adopted its risk framework and underwriting guidelines from Church Mutual, the concentration of property-related business and reinsurance dependence remain core risk factors.
CM Select is now owned by MGT Partners LLC, which provides an element of financial support as it contributed capital to support growth initiatives at the time of the acquisition with additional capital available to support future growth. Further, strategic support comes in the form of risk and operational oversight from the board of directors with extensive insurance experience. The ratings and outlooks consider transitional and service agreements between CM Select and Church Mutual, along with a 100% reinsurance agreement on all legacy business, including new and renewal religious and non-profit-related business. The company anticipates placing external reinsurance ahead of writing retained business in 2024.
At the time of the withdrawal, CM Select Insurance Company’s prior ratings were under review with negative implications following the announcement that MGT Partners LLC would be acquiring CM Select Insurance Company from Church Mutual earlier in the year. MGT Partners LLC completed the acquisition of CM Select Insurance Company on Oct. 1, 2023, and the closing has resulted in AM Best withdrawing the entity’s ratings. While AM Best’s policy is for a final rating to be completed along with the withdrawal, a final rating was not able to be completed since it is no longer able to be rated under the prior structure.
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 relevant 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 webpage. 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.
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