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AM Best Places Credit Ratings of Church Mutual Insurance Group’s Members Under Review With Negative Implications

AM Best has placed under review with negative implications the Financial Strength Rating of A (Excellent) and the Long-Term Issuer Credit Rating of “a” (Excellent) of Church Mutual Insurance Company, S.I. and its wholly owned subsidiaries, CM Regent Insurance Company and CM Vantage Specialty Insurance Company All companies are domiciled in Merrill, WI and collectively referred to as Church Mutual Insurance Group (Church Mutual).

The Credit Ratings (ratings) of Church Mutual were placed under review with negative implications following material erosion in surplus and risk-adjusted capital as measured by Best’s Capital Adequacy Ratio (BCAR). Surplus erosion was primarily a function of significant adverse loss reserve development related to weather losses, liability losses and defense costs, particularly as litigation and social inflation impacted results. Performance was also affected by current accident year storm losses and increased loss cost severity amid inflation and supply chain issues. Church Mutual is pursuing several capital management strategies to improve its capital position, including capital contributions in the near term, while concurrently engaging reinsurance and surplus relief options. The group is also making changes to its underwriting profile intended to reduce exposure on lines of business that have contributed to underwriting and reserve volatility.

Nonetheless, the potential for future adverse loss reserve development remains a rating concern. Plans are expected to materialize and be enacted over the near term. In the absence of sufficient anticipated improvement and execution on said plans, the ratings will likely be downgraded.

The ratings will remain under review with negative implications as the group's capital management strategies are implemented and AM Best analyzes the impact of such actions. Given the degree of capital erosion, negative rating action remains a possibility.

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

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