AM Best has revised the outlook to negative from stable for the Long-Term Issuer Credit Rating (Long-Term ICR) and affirmed the Financial Strength Rating (FSR) of A (Excellent) and the Long-Term ICR of “a+” (Excellent) of Shelter Mutual Insurance Company (Shelter Mutual) (Columbia, MO) and its property/casualty (P/C) subsidiaries (collectively referred to as Shelter). Concurrently, AM Best has revised the outlook to negative from stable for the Long-Term ICR and affirmed the FSR of A (Excellent) and the Long-Term ICR of “a+” (Excellent) of Shelter Life Insurance Company (Shelter Life) (Columbia, MO), which is a wholly owned subsidiary of Shelter Mutual. The outlook of the FSRs is stable. (Please see below for a detailed listing of the P/C companies and ratings.)
The Credit Ratings (ratings) of Shelter reflect its balance sheet strength, which AM Best assesses as strongest, as well as its adequate operating performance, neutral business profile and appropriate enterprise risk management (ERM).
The revised outlook of the Long-Term ICRs considers the elevated underwriting results Shelter Mutual has produced in recent years, primarily resulting from convective storms and catastrophe events in its core states of operation, along with an increased severity of loss due to an increase in inflation. However, despite the deterioration in operating performance, Shelter Mutual’s balance sheet strength remains at the strongest assessment level supported by its strongest level of risk-adjusted capitalization, as measured by Best’s Capital Adequacy Ratio (BCAR). The company’s business profile assessment remains neutral as the rating unit, through its various entities the group, distributes personal lines focused products through captive agents and independent agents. Shelter Mutual’s geographic distribution exposes it to hurricanes, severe convective storms and earthquakes, particularly as it relates to its top three states, Missouri, Arkansas and Oklahoma, which account for roughly half of the direct book.
The ratings of Shelter Life reflect its balance sheet strength, which AM Best assesses as very strong, as well as its adequate operating performance, neutral business profile and appropriate ERM.
The revised outlook of the Long-Term ICRs for Shelter Life considers the deterioration of Shelter Mutual’s operating results and the impact it can have on Shelter Life’s positive rating enhancement from its parent. Shelter Life’s balance sheet strength assessment remains at the very strong level and is supported by the strongest level of risk-adjusted capitalization and consistent surplus growth due to positive operating performance. The company’s business profile assessment remains neutral as it is largely focused on cross-selling ordinary life products through its P/C agency force in connection with its personal lines property and casualty products.
The FSR of A (Excellent) and the Long-Term ICRs of “a+” (Excellent) have been affirmed, with the outlook for the Long-Term ICRs revised to negative from stable and the outlook of the FSR maintained at stable for the following P/C subsidiaries of Shelter Mutual Insurance Company, which are collectively referred to as Shelter:
- Haulers Insurance Company, Inc.
- Shelter General Insurance Company
- Shelter Reinsurance Company
- AmShield Insurance Company
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 © 2023 by A.M. Best Rating Services, Inc. and/or its affiliates. ALL RIGHTS RESERVED.
Senior Financial Analyst
+1 908 882 1774
Erik Miller, CFA
+1 908 882 2120
Associate Director, Public Relations
+1 908 882 2310
Senior Public Relations Specialist
+1 908 882 2318