A.M. Best has upgraded the Financial Strength Rating to A-(Excellent) from B++ (Good) and the Long-Term Issuer Credit Rating to"a-" from "bbb+" of Wayne Mutual Insurance Co. (Wayne) (Wooster, OH). Theoutlook of these Credit Ratings (ratings) has been revised to stable frompositive.
The rating upgrades reflect the sustained improvement inWayne's underwriting and operating results over the past several years, which strengthenedits risk-adjusted capitalization. The ratings further acknowledge management'simproved enterprise risk management capabilities in recent years and theexpectation that the company's favorable operating results will remain strongand continue to strengthen the capital position.
These positive rating factors are partially offset byWayne's geographic concentration of risk. As a single state writer in Ohio, thecompany is exposed to severe weather-related events, as well as changes in thejudicial, regulatory and economic environment. However, the company maintains acomprehensive reinsurance program that reduces the impact from a catastrophicevent to a manageable level. While the company has reported strong operatingperformance, as reflected by Wayne's favorable five-year average pure lossratio that outperforms the composite, it does maintain an elevated expenseratio relative to the composite.