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AM Best Downgrades Credit Ratings of McMillan-Warner Mutual Insurance Company

AM Best has downgraded the Financial Strength Rating to B- (Fair) from B+ (Good) and the Long-Term Issuer Credit Rating to “bb-” (Fair) from “bbb-” (Good) of McMillan-Warner Mutual Insurance Company (MWM) (Marshfield, WI). The outlook of these Credit Ratings (ratings) is negative.

The ratings reflect MWM’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.

The rating downgrades reflect the considerable weakening in MWM’s key balance sheet strength metrics as well as its overall level of risk-adjusted capitalization, as measured by Best’s Capital Adequacy Ratio (BCAR) through Sept. 30, 2023. Since year-end 2022, policyholders’ surplus has fallen sharply influenced by ongoing volatility on the underwriting side due to catastrophe losses as well as unrealized capital losses. Further, the company’s surplus was overstated on its 2022 annual statement filing as a result of an error related to an aggregate reinsurance recovery. Over the most recent year, net premiums have risen significantly due to the removal of a personal automobile quota share, causing underwriting leverage measures to spike and exceed the personal property industry composite average by a wide margin. Thus, the company’s balance sheet strength assessment was downgraded to adequate from strong.

While management continues to address the deterioration through rate increases, cancelling or non-renewing policies given its tighter underwriting guidelines, the negative outlook on the balance sheet strength building block considers the uncertainty in the overall effectiveness of these actions. In the event of additional deterioration in policyholders’ surplus or overall risk-adjusted capitalization, the ratings could be further downgraded.

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

Copyright © 2023 by A.M. Best Rating Services, Inc. and/or its affiliates. ALL RIGHTS RESERVED.


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