AM Best has revised the outlooks to negative from stable and affirmed the Financial Strength Rating of A (Excellent) and the Long-Term Issuer Credit Rating of “a” (Excellent) of MMG Insurance Company (MMG) (Presque Isle, ME).

The Credit Ratings (ratings) reflect MMG’s balance sheet strength, which AM Best assesses as very strong, as well as its adequate operating performance, neutral business profile and appropriate enterprise risk management (ERM).

The revised outlooks to negative from stable reflect MMG’s ongoing issues with adverse loss reserve development, which has been reported in recent periods coupled with underwriting and reserve leverage metrics that compare unfavorably to composite averages. Development has been influenced by medical and economic inflations, as well as a pandemic-influenced latency in the judicial process, embedded within is development on weather claims, notably Winter Storm Elliot in prior years. Management has implemented a series of initiatives to reverse the adverse developments; however, unfavorable development continues as corrective measures adjust to a new norm of severity. Some of the notable initiatives include reviewing and updating reserves for all open claims, strengthening incurred but not reported reserves, collaborating with external actuaries to establish best practices and using technological platforms to improve claim analytics.

AM Best assesses MMG’s balance sheet strength as very strong, driven by the strongest level of risk-adjusted capitalization, as measured by Best’s Capital Adequacy Ratio (BCAR), stabilization in surplus growth, a conservative investment portfolio consisting of high-quality fixed-income securities, cash and cash equivalents and financial flexibility afforded through the holding company, which has demonstrated a willingness and ability to contribute capital to the insurance operations. Partially offsetting these positive factors are MMG’s underwriting leverage measures that have trended upward in recent years and are modestly higher than the composite averages, as well as the adverse reserve development patterns reported in recent years.

AM Best assesses MMG’s operating performance as adequate based on modest improvement observed through September 2025. Overall, the company’s loss & loss adjustment expense ratios have outperformed the composite average, while the underwriting expense ratio is elevated, driven by higher commission costs, which are typical of New England carriers. Commission costs are structured to align with business goals and remain competitive in the market. Management has implemented multiple profitability initiatives in recent years including significant rate activities; therefore, the adequate trend of operating performance reported through third-quarter 2025 is expected to continue for the remainder of 2025, and in the future.

AM Best assesses MMG’s business profile as neutral as it has a long-standing and well-established market presence with extensive knowledge of the operating territory. The company is a Northeast and Virginia personal and commercial carrier, primarily offering homeowners, business owners and auto coverages. Business is distributed through a network of independent agents. MMG has invested in technological initiatives in recent years to enable it to increase speed of process and provide timely data. In addition, the company utilizes technology to push loss prevention and awareness expanding more actively on capability with digital initiatives.

AM Best assesses MMG’s ERM as appropriate as it maintains a formalized program deemed appropriate for its risk profile. The board and ERM committees closely monitor and focus on risk avoidance, risk reduction through careful risk selection and efficient risk transfer. The company’s ERM framework outlines major strategic, operational, underwriting, market, credit and emerging risks, along with measurable risk tolerance statements and control measures. In addition, MMG utilizes a comprehensive catastrophe reinsurance program given its geographic footprint that remains susceptible to weather-related events.

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