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Editorial Advisory Board

  • Professor Andrea M. Armani, University of Southern California
  • Ruti Ben-Shlomi, Ph.D., LightSolver
  • James Butler, Ph.D., Hamamatsu
  • Natalie Fardian-Melamed, Ph.D., Columbia University
  • Justin Sigley, Ph.D., AmeriCOM
  • Professor Birgit Stiller, Max Planck Institute for the Science of Light, and Leibniz University of Hannover
  • Professor Stephen Sweeney, University of Glasgow
  • Mohan Wang, Ph.D., University of Oxford
  • Professor Xuchen Wang, Harbin Engineering University
  • Professor Stefan Witte, Delft University of Technology

AM Best Revises Outlooks to Negative for Machinery Insurance, Inc., An Assessable Mutual Insurer

AM Best has revised the outlooks to negative from stable and affirmed the Financial Strength Rating of B++ (Good) and the Long-Term Issuer Credit Rating of “bbb” (Good) of Machinery Insurance, Inc., An Assessable Mutual Insurer (Machinery) (Jacksonville, FL).

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

The negative outlooks reflect the deterioration in Machinery’s net underwriting income and pre-tax operating income over the most recent five-year period, driven by a significant decline in premiums over most of that period. The decline in premiums was attributable to the intentional graduation of policies to larger surety writers by its agency, which was accelerated by inflationary trends, as well as increased competition by larger surety writers in the company’s own small account market niche. Consequently, Machinery’s operating performance metrics have fallen out of line in recent years with the median of “strong” assessed rating units within its fidelity and surety composite. A continuation of this trend could result in a reduction of the company’s “strong” operating performance assessment.

However, Machinery has continued to grow surplus organically in each of the last five years through net investment income, net underwriting income and capital gains on its equity portfolio. Despite the deterioration in operating performance, Machinery maintains a strong overall balance sheet, support by risk-adjusted capitalization at the strongest level.

Machinery’s business profile is assessed as “very limited” due to its geographic and product concentration, as well as its intention to remain a tax-exempt organization under federal law, which limits its revenue to less than $600,000 annually. Machinery’s ERM is considered appropriate for its risk profile, commensurate with the complexity and scale of the company. Machinery’s small size allows for management to remain actively involved in all risk assessments and continuing to develop its risk appetite through strict underwriting practices.

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.

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.

Copyright © 2025 by A.M. Best Rating Services, Inc. and/or its affiliates. ALL RIGHTS RESERVED.

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