On March 15, 2024, AM Best announced that the rating for the Church Mutual Group of insurance companies, “A (Excellent) with a stable outlook,” is currently under review with negative implications. The review was prompted by poor operating performance in 2023 and adverse loss development in prior years, which reduced Church Mutual’s policyholder surplus. The review process provides AM Best with additional time for a quantitative and qualitative evaluation of Church Mutual’s financial condition and operating performance.
Many property and casualty insurers faced multiple challenges in 2023 – increased claims and claim costs, a challenging judicial environment in some states (social inflation) and catastrophic events that produced a record number of claims. These challenges impacted Church Mutual as well, and they are the primary reasons behind the company’s reduction in surplus.
Church Mutual has been taking strategic, proactive measures to strengthen its book of business and reduce exposure to excessive risks with significant progress to date.
“We are confident these measures will have a positive impact on our profitability in 2024 and beyond,” said Alan Ogilvie, president and chief executive officer. “Our balance sheet is strong, our policyholder surplus is still robust and we are well prepared for the future. We have been in business for more than 125 years and remain deeply committed to our customers and those they serve.”
Q1: Has AM Best changed Church Mutual’s rating?
A1: AM Best has announced that the rating for the Church Mutual Group of insurance companies, “A (Excellent) with a stable outlook,” is currently under review with negative implications.
Q2: Why is Church Mutual under review?
A2: The review was prompted by poor operating performance in 2023 and adverse loss development in prior years, which reduced Church Mutual’s policyholder surplus. The review allows time for further quantitative and qualitative analysis.
Q3: What factors led to the poor operating performance, adverse loss development and reduction in surplus?
A3: Property and casualty insurance carriers faced multiple challenges in 2023 – the increased number and cost of claims, a challenging judicial environment in some states (social inflation) and catastrophic events that produced a record number of claims. These are industry-wide challenges. Church Mutual faced the same challenges, which are the primary reasons behind Church Mutual’s reduction in surplus.
Q4: How is Church Mutual responding to these challenges and what are the company’s expectations?
A4: Church Mutual has been proactively addressing these challenges to better manage the risks throughout its book of business, nationwide. The company’s leadership team is confident these measures will have a significant, positive impact on profitability in 2024 and beyond.
Q5: In general, is Church Mutual in good financial health?
A5: Yes. Church Mutual’s balance sheet is strong, its policyholder surplus is still robust and the company is well prepared for the future.
Q6: Can customers still be confident that Church Mutual can support them?
A6: Yes. The company’s commitment to its customers remains solid, balanced with its commitment to remain financially strong.
