Retailers Mutual Insurance Company—formed in 2006 when Michigan Retailers Association converted its self-funded workers’ compensation program—has earned a Financial Stability Rating of A, or Exceptional, from Demotech, Inc., a Columbus, Ohio-based financial analysis and actuarial services firm.
An A rating is assigned to insurers who possess “an exceptional ability to maintain liquidity of invested assets, quality reinsurance, acceptable financial leverage and realistic pricing while simultaneously establishing loss and loss adjustment expense reserves at reasonable levels,” according to Demotech.
“This is an important independent evaluation of Retailers Mutual’s finances and operations,” said James P. Hallan, Retailers Mutual president and chief operating officer. “We’re pleased and not surprised at our rating.”
Joe Kay, chair of the Retailers Mutual Board of Directors, added: “It is a testament to our financial stability and recognizes our past practices of sound underwriting, claims management and prudent investment.”
Demotech serves the insurance industry, providing pricing analysis, state filings assistance, Financial Stability Ratings and support for other required regulatory reporting.
Financial Stability Ratings are based on a series of quantitative ratios and considerations. They are assigned after an extensive process of analysis of the insurer’s financial information, including financial statements and business plans; proposed underwriting guidelines and application; initial rate, rule and form filings; anticipated investment guidelines; proposed administrative agreements with principals and third parties, and many other factors.
A Financial Stability Rating summarizes Demotech’s opinion “of the insurer’s ability to insulate itself from the business cycle that exists in the general economy as well as the underwriting cycle that exists in the industry,” according to Demotech.
For more information about Demotech and its financial stability rating system, visit the company’s website, www.demotech.com.
