Business insurance

AM Best revises outlook to positive for Texas Mutual Insurance Company

OLDWICK, New Jersey – (COMMERCIAL THREAD) –AM Best revised the outlook from stable to positive and confirmed Texas’ financial strength rating (FSR) of A (excellent) and long-term issuer credit rating (long-term ICR) of “a +” (excellent) Mutual Insurance Company (Texas Mutual) (Austin, Texas).

The credit rating (ratings) reflects the strength of Texas Mutual’s balance sheet, which AM Best considers to be the strongest, as well as its strong operational performance, limited business profile and proper management of business risks.

The revised outlook for Texas Mutual to positive reflects its superior market position in the Workers’ Compensation (WC) segment in Texas, which is demonstrated by an average market share of 42% over the past five years. The company’s market share has grown steadily since the 2008 recession, when the company had a 29% market share; the company is the 16th largest WC issuer in the United States based on direct premiums written. The business profile of the company benefits from the fact that the company is not concentrated in a single sector, as Texas Mutual is the market leader in all industrial sectors: service, construction, retail, manufacturing, finance, health and education, hospitality, transport, agriculture, mining and public administration sectors. While maintaining this superior market position, the company continued to generate consistent excess earnings and underwriting profits, which compare favorably to the WC composite.

The positive outlook reflects AM Best’s expectations that Texas Mutual will continue to demonstrate its “integral nature to the Texas WC market while maintaining risk-adjusted capitalization at the highest level, as measured by the ratio of Best’s capital adequacy (BCAR), and underwriting results that compare favorably to the WC composite.

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