OLDWICK, N.J.--(BUSINESS WIRE)-- A.M. Best Co. has assigned a financial strength rating of A- (Excellent) and an issuer credit rating of “a-” to Coverys RRG, Inc. (Boston, MA). The outlook assigned to both ratings is positive.
These ratings recognize the implementation of a quota share reinsurance agreement between Coverys RRG and Medical Professional Mutual Insurance Company (ProMutual) (Boston, MA). In addition to providing substantial reinsurance support to Coverys RRG, Inc., ProMutual will provide the company with administrative services. Coverys RRG, Inc. also will benefit from ProMutual’s leadership position in the medical professional liability market, its long-term profitable operations and the continued support for its members through strong patient safety and risk management programs.
Partially offsetting these positive rating factors are the market risks inherent within the medical professional liability insurance sector including tort reform, price competition and regulatory trends. In addition, due to Coverys RRG, Inc.’s position as a start-up, it is exposed to the potential impact of adverse loss experience or insufficient rate structure and the stresses these may cause on resources.
Founded in 2012, Coverys RRG, Inc. initially expects to write medical professional liability insurance in New York State. The outlook is based on the organization’s ability to maintain underwriting discipline and produce favorable operating results.
Performance factors that could lead to positive rating actions include, but are not limited to, price competition, health care reform measures, the implementation of tort-reform measures or operating metrics recorded outside of A.M. Best’s expectations. In addition, because of the depth of the relationship between the two organizations, changes in the ratings of ProMutual may impact Coverys RRG, Inc.’s ratings.
The methodology used in determining these ratings is Best’s Credit Rating Methodology, which provides a comprehensive explanation of A.M. Best’s rating process and contains the different rating criteria employed in the rating process. Key criteria utilized include: “Risk Management and the Rating Process for Insurance Companies”; “Understanding BCAR for Property/Casualty Insurers”; and “Rating Members of Insurance Groups.” Best’s Credit Rating Methodology can be found at www.ambest.com/ratings/methodology.
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A.M. Best Company, Inc.
Robert Raber, 908-439-2200, ext. 5696
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Assistant Vice President
Rachelle Morrow, 908-439-2200, ext. 5378
Senior Manager, Public Relations
Jim Peavy, 908-439-2200, ext. 5644
Assistant Vice President, Public Relations
Source: A.M. Best Company, Inc.