AM Best has removed from under review with positive implications and upgraded the Financial Strength Rating to B (Fair) from C++ (Marginal) and the Long-Term Issuer Credit Rating (Long-Term ICR) to “bb” (Fair) from “b” (Marginal) of Wolverine Insurance Company (Wolverine) (Dowagiac, MI). The outlook assigned to these Credit Ratings (ratings) is stable.

The ratings reflect Wolverine’s balance sheet strength, which AM Best assesses as adequate, as well as its marginal operating performance, limited business profile and marginal enterprise risk management.

These rating actions follow the completed acquisition of Wolverine Mutual Insurance Company (WMIC) on Aug. 1, 2025, by Clover Financial Corporation (Clover). With the closing of the acquisition, WMIC was re-incorporated in Michigan as a newly formed stock entity named Wolverine Insurance Company (Wolverine). At closing, Clover contributed $7.0 million to Wolverine.

Clover is a wholly owned subsidiary of Oakland Financial Corporation (Oakland). No debt was assumed by Oakland to finance the acquisition. Clover paid for the acquisition with capital contributed from Oakland. Oakland owns Cherokee Insurance Company (Cherokee), which maintains a Long-Term ICR of “a” (Excellent) with a stable outlook. Cherokee is a leading commercial auto lines writer in Michigan.

The ratings upgrade reflects significantly improved balance sheet metrics for Wolverine following the acquisition. Wolverine’s risk-adjusted capitalization significantly strengthened to a very strong level, as measured by Best's Capital Adequacy Ratio (BCAR), due to the $7.0 million capital contribution from its parent company as part of the acquisition. In addition, Cherokee and Wolverine previously entered into a 25% quota share agreement on Wolverine’s property lines of business, effective Jan. 1, 2025. Capital levels are expected to remain supportive of the balance sheet strength assessment over the intermediate term. However, Wolverine’s risk-adjusted capitalization has been impacted by declines in policyholder surplus in recent years prior to its acquisition, due to pre-tax operating losses driven by marginal underwriting results. The company's underwriting results were impacted by unfavorable severity trends in personal auto and catastrophe losses in recent years, offset partially by corrective actions including rate increases, expense management initiatives and tightened underwriting guidelines.

While operating results have been volatile over the past few years, AM Best expects Wolverine’s operating performance to benefit from post-acquisition profitability initiatives implemented by management, including anticipated costs savings from being part of a larger organization, as well as management support from Cherokee.

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 pertinent 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 web page. 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.

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